Sony Ericsson Reports Lower Q4 Unit Sales

By Steve Smith -- TWICE, 1/26/2009

LONDON — Sony Ericsson reported lower unit sales in the fourth quarter, ended Dec. 31, 2008, due mostly to the global economic downturn.

Units shipped in the fourth quarter were 24.2 million, a sequential decrease of 6 percent and a year-on-year decrease of 21 percent.

Sales for the quarter were 2.9 billion euros, an increase of 4 percent sequentially due to a positive impact of currency fluctuations, and a decrease of 23 percent compared with Q4 2007. The decline in sales year on year was driven by lower volumes, due to the global economic slowdown that resulted in contracting consumer demand and decreased availability of credit, the company said.

Gross margin became 15 percent due to negative impact from exchange-rate fluctuations, restructuring charges and material write-offs.

Foreign-exchange fluctuations had a positive impact on sales in total, but a large negative impact on costs of goods sold (i.e. costs increased) sequentially, as well as year on year.

“In economic terms, 2008 has been a tumultuous year with world markets experiencing a serious downturn. The mobile phone market has been greatly affected by this and as expected, the fourth quarter continued to be very challenging for Sony Ericsson. We foresee a continued deterioration in the market place in 2009, particularly in the first half,” said Dick Komiyama, president, Sony Ericsson.