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Sony Ericsson Announces Third Quarter Results |
jcwhite_uk
Joined: Feb 18, 2004
Posts: > 500
From: Dorset, UK Phone:Xperia Z1
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Q3 highlights:
* Decline in global handset market slowing down
* Positive trend from continuing transformation programme
* External financing arranged
* Refreshed brand in time for Aino™ and Satio™ launch in Q4
The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the third quarter ended September 30, 2009 is as follows:
Q3 2008 Q2 2009 Q3 2009
Number of units shipped (million) 25.7 13.8 14.1
Sales (Euro m.) 2,808 1,684 1,619
Gross margin (%) 22% 12% 16%
Operating income (Euro m.) -33 -274 -193
Operating margin (%) -1% -16% -12%
Restructuring charges (Euro m.) 35 1 2
Operating income excl.
restructuring charges (Euro m.) 2 -274 -191
Operating margin excl.
restructuring charges (%) 0% -16% -12%
Income before taxes (IBT) (Euro m.) -23 -283 -199
IBT excl. restructuring charges (Euro m.) 12 -283 -198
Net income (Euro m.) -25 -213 -164
Average selling price (Euro) 109 122 114
Units shipped in the quarter were 14.1 million, an increase of 2% quarter-on-quarter and a decrease of 45% year-on-year. Sales for the quarter were Euro 1,619 million, a sequential decrease of 4% and a year-on-year decrease of 42%. The sequential decline in ASP (Average Selling Price) was due to product mix and continued challenging market conditions.
Gross margin improved sequentially but dropped year-on-year due to lower sales and foreign exchange fluctuations. The sequential improvement was seen in both percentage rate and volume, driven by cost savings actions and successful sales of the W995 Walkman® phone.
Income before taxes for the quarter, excluding restructuring charges, was a loss of Euro 198 million compared to a loss of Euro 283 million from the previous quarter. The reduced loss was due to better gross margin, as well as reduced operating expenses.
“Our business in the third quarter started to show the effects of our ongoing transformation programme. Having refreshed our brand we are now better positioned to support the launch of new products such as Aino™ and Satio™ in Q4 2009. We have cleared channel inventories, and have continued to realign internal resources and improve efficiency. We have also arranged external financing to strengthen the company’s financial position,” said Dick Komiyama, outgoing President, Sony Ericsson. “Transforming the business for future growth and returning Sony Ericsson to profitability is the focus of the senior management team and will continue under the new leadership.”
As of September 30, 2009, Sony Ericsson had a net cash position of Euro 841 million.
Since the beginning of the quarter, facilities of Euro 455 million were signed to strengthen the balance sheet and improve liquidity. Euro 155 million were drawn by the end of September and Euro 100 million were drawn in the beginning of October. In addition, a two-year committed back-up facility of Euro 200 million is available but has not been utilized. The parent companies have guaranteed Euro 350 million of these facilities on a 50/50 basis.
Programmes started since mid 2008 to reduce annual operating expenses by Euro 880 million are continuing, with the full benefit expected during the second half of 2010. The total restructuring charges for these programmes are estimated to be well within the previously announced Euro 500 million.
As of October 15, 2009; Sir Howard Stringer, Chairman, CEO and President of Sony Corporation and a member of the Sony Ericsson board, became Chairman of the Sony Ericsson board succeeding Carl-Henric Svanberg. At the same time, Bert Nordberg became President of Sony Ericsson succeeding Dick Komiyama, who remains as Executive Advisor until the end of 2009.
Sony Ericsson forecasts that the global handset market for 2009 will contract by approximately 10% from around 1,190 million units in 2008. Sony Ericsson estimates that its market share in units was about 5% in the third quarter.
The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB.
Satio™ and Aino™ are trademarks or registered trademarks of Sony Ericsson Mobile Communications AB.
WALKMAN® is a trademark of Sony Corporation.
Sony is a registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson.
Any rights not expressly granted herein are reserved. Subject to change without prior notice.
A live webcast of the conference call will be available on October 16, 2009 at the following times:
TIMING
14:00 UK time (BST)
15:00 Central European time (CET)
09:00 US Eastern time (EDT)
22:00 Japan time (JST)
WEBCAST:
A live webcast of the conference call will be available at: http://www.ericsson.com/ericsson/investors/
Or please click here to join the webcast directly:
http://www.thomson-webcast.ne[....]ec29148a44ec4b8077c845c5b4cbba
The archived webcast will be available approximately one hour after the completion of the conference call.
[ This Message was edited by: jcwhite_uk on 2009-10-16 12:31 ] Checkout my photos at My Website"Duct tape is like the force. It has a light side, a dark side, and it holds the world together." |
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hihihans
Joined: Mar 15, 2009
Posts: > 500
From: Netherlands
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Good to see they lost less. With Aino and Satio they can follow that trend in Q4.
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McKinley
Joined: Feb 23, 2004
Posts: > 500
From: Sweden, USA Los Angeles CA
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Now let us just hope we will see a trend change for the last quarter.
I'm not so sure Satio, Aino and Yari will be enough for this? |
goldenface
Joined: Dec 17, 2003
Posts: > 500
From: Liverpool City Centre
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4th Quarter results should show a massive improvement simply because it's the quarter where most phones are sold - Aino, Satio and Yari have been launched at the right time.
The W995 has been a great success and it'll be pity if no more mid-end Walkmans and Cyber-shots are releases as these are big money earners. The W995 has shown that people still want a regular keypad on their phones and they would be silly to ignore this.
[ This Message was edited by: goldenface on 2009-10-16 13:59 ] |
carkitter
Joined: Apr 29, 2005
Posts: > 500
From: Auckland, NZ
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These figures are not good; I'm very worried. 
SE have been losing money every quarter for too long. They predict the market to be down 10% this year but SE are down 42%. That means they really need a whole new product mix because the market has shifted. Hopefully Satio, Aino and Rachael can do the job but I think more models will be needed to turn around a loss of 193 million Euro's. If the market improves it will buy SE some time but really, SE's problems stem from not having met the changing needs of the market.
Borrowing to cover continued losses is worrying but shows a commitment to the JV by both partners so any rumours of a split are scotched for the time being, but how long can they continue to lose money? Major savings from the expensive restructuring are still 8 months away. At this point I would be either looking for a buyer or radically changing the product mix.
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c_vignesh
Joined: Aug 16, 2004
Posts: > 500
From: TamilNadu,India
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From what is yet to be released for  this year compared to is rivals things doesn't look bright to me ....
In the indian market, atleast they have launched yari, aino and satio at reasonable price points ...but competing with smartphones from nokia, samsung, htc in that same price range its mighty tough
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goldenface
Joined: Dec 17, 2003
Posts: > 500
From: Liverpool City Centre
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They did make it plain earlier on in the year that they didn't expect to return to profit until early 2010 so this was sort of expected.
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Bonovox
Joined: Apr 13, 2008
Posts: > 500
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Yes a promising new fresh start with nice products but for those that can afford them. Very expensive Satio anyone?
Phone?? What phone?? |
carkitter
Joined: Apr 29, 2005
Posts: > 500
From: Auckland, NZ
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To turn a profit in Q1 2010, they would have to have successful model launches in Q4 2009. I think they need more Android powered touchscreen phones to turn around a 193m Euro loss in 2 quarters, especially with things still so bad that Nokia is hurting to the tune of 12b Euro's. Nokia's figures include the Nokia Siemens Network division whose turnover is down signifying that the Network Providers are spending less because they see customers continuing to spend less.
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Dups!
Joined: Sep 24, 2006
Posts: > 500
From: GMT +2
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These results are bad whichever way you look at it, I was expecting a loss but not this much.
If they have any chance of really making at all then a much narrower loss or -fingers crossed- at the very least a break even result in the last quarter is much needed.
I do think that Rachael will sell very well to lift them up a bit. I'm just worried about what I read about it not having the Snapdragon processor.
Hopefully they pull through. Q2 next year should clarify whether they continue doing business or fold.
I just don't see them continuing if by Q2 they are still making losses.
It's not what you do or even how you do it but in what state of mind you do it: Dups! 2009 |
korbindallis
Joined: Jun 18, 2004
Posts: > 500
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Will I do love the new brand positioning and alignment with Sony which makes for a more slick brand and the new logo's are a great idea, best of luck in 2010 i'm sill staying with Sony Ericsson
I just hope they put out more touch screen phones and if they can do more full Aino touch screen phones and more android phones and more environment friendly phone which i like 
[ This Message was edited by: korbindallis on 2009-10-16 16:36 ] [addsig] |
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Posted: 2009-10-16 13:28
