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Sony Ericsson Q2 Sales Climb 18%

Tokyo – Mobile phone maker Sony Ericsson enjoyed an 18 percent rise in sales during the second quarter, hitting $1.3 billion, up from $1.1 billion in the second quarter of 2002.

At the same time, the company shipped 6.7 million units in the three months, a 34 percent increase over the 5 million shipped in the second quarter a year ago.

The fledgling company, which traces its heritage to consumer electronics manufacturer Sony and Swedish mobile systems maker Ericsson, has been struggling since its inception nearly two years ago. It has reported losing quarters, except for one break-even period, throughout, but predicts second half profit as it continues to produce popular new phones and cuts costs.

Second quarter net continued in the red, with Sony Ericsson reporting a loss of $99.2 million, up somewhat from the $93.6 million net loss recorded in the same three months in 2002. The company reported $50.7 million in pre-tax losses, adjusted for restructuring costs, which about halved the $110.5 loss in the second quarter a year earlier.

Sony Ericsson, which claimed 84 percent year-on-year growth for its GSM shipments, expects to be profitable in the second half as a result of increasing momentum in the company’s new GSM and Japanese products. However, the company will not be profitable for the full year 2003 because of restructuring costs and losses incurred during the first half.

The company reported market share of 6.4 percent in the second quarter, up from 5 percent in the first quarter. A 7 percent to 10 percent market share figure initially was said to be needed for it to move into the black, but following aggressive cost cutting, the company estimated it could become profitable with about a 6 percent share.