goldenface
Joined: Dec 17, 2003
Posts: > 500
From: Liverpool City Centre
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Sony Ericsson’s Profit Up 11%
The cell phone company’s results top expectations on strong sales of new models.
October 17, 2005
Sony Ericsson said Monday its third-quarter earnings grew 11 percent, beating analyst expectations, thanks to strong sales of new cell phone models.
The London-based company, a joint venture of Japan’s Sony and Sweden’s Ericsson, said pre-tax profit rose to €151 million ($182.1 million) from €136 million ($164 million) a year ago. Analysts expected pre-tax profit of €104 million, according to an SME Direkt survey.
Including taxes, Sony Ericsson’s profit grew to €104 million ($125.3 million), up 16 percent from €90 million.
Sales for the world’s fifth-largest cell phone maker grew nearly 23 percent in the third quarter, reaching €2.06 billion ($2.48 billion) from €1.68 billion ($2.02 billion) in the same period last year. Sales topped analyst estimates of €1.75 billion.
As a joint venture, Sony Ericsson doesn’t have its own stock and Sony and Ericsson are traded separately. In recent trading, Ericsson was down $0.42 to $34.65, and Sony was down $0.18 to $33.29.
Sony Ericsson said its growth outpaced the global handset market, which also grew faster than expected. The company said it is “reaping the rewards” of earlier R&D investment, as new models—the W800 Walkman phone, the K750 camera phone, and the K600 series of 3G phones—sold well.
Higher-End Phone Popularity
The company says the popularity of higher-end phones had a positive effect and boosted the profile of more affordable models. But the average selling price of its phones fell 5 percent to €148.91 in the third quarter from €156.82 in the year-ago quarter. However, the average price is up from €136.78 in the second quarter of this year.
Miles Flint, Sony Ericsson president, said the quarter proved the company’s strategy of expanding the product portfolio into high-end imaging, music, and 3G products is working.
“We are increasingly benefiting from the opportunities created by the joint venture, and with three new Walkman phones shipping in the fourth quarter, we are optimistic that Sony Ericsson can set the standard in music as well as imaging going forward,” Mr. Flint said.
In July, Sony Ericsson posted 23 percent lower second-quarter earnings that missed Wall Street expectations. At the time, the company blamed increased research spending as it worked to introduce new phones.
“We said in Q2 that the music strategy was the biggest gamble in the company’s portfolio, but it seems the approach is paying off nicely,” said Martin Garner, an analyst with London-based research firm Ovum. “It now looks as though, in spite of Motorola’s faltering start, the category of music phones is robust, and other vendors, who are lining up their music devices, will be encouraged by these results.”
In other news, Sony Ericsson Monday announced two new products, including the company’s first 3G music phone and a new FM music transmitter.
The W900 Walkman phone, based on the Universal Mobile Telecommunication System (UMTS), includes a 2-megapixel camera, a 3D Java gaming engine, and downloading and browsing capabilities for images, video, graphics, and games.
The W900 will launch in the fourth quarter, the company said. The W550 and W600 Walkman phones are also expected to launch this quarter.
The music transmitter allows Sony Ericsson customers to use car or home stereos to listen to tracks on their cell phones by sending music from handsets to nearby radio receivers via the FM radio frequency band.
Sopme Good News.
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Posted: 2005-10-18 15:24
