Sony Ericsson Sales Down, Profits Near Zero


London - Cellphone maker Sony Ericsson continued to stumble in its fiscal third quarter, posting "slightly above break-even" net profits on a 1 percent decline in sales.

The performance followed a second quarter in which the company slipped back into the red following five consecutive quarters of net profits.

In the Americas, sales fell 45 percent compared with the year-ago quarter, with year-to-date Americas sales falling 28 percent.

The company has been cutting back its selection of feature phones to focus more on smartphones, and it said it would shift its entire portfolio to smartphones in 2012. In the third quarter, the company's Android Xperia smartphones accounted for more than 80 percent of sales.

For the quarter, sales were down 1 percent to 1.59 million euros ($2.2 billion at an exchange rate of $1.39 to one euro) and down for the year to date by 18 percent to 3.9 billion euros ($5.44 billion). The number of units shipped fell 8.7 percent from the year-ago quarter to 9.5 million.

Operating income fell 40 percent in the quarter to 38 million euros $52.7 million) and fell 83 percent for the year-to-date to 21 million euros ($29.1 million).

Net income was slightly above zero, down from a year-ago net income of 49 million euros ($68 million) but up from the second quarter's net loss of 50 million euros ($69.3 million). For the year-to-date, the company posted a net loss of 40 million euros ($55.5 million) compared with a year-ago net profit of 82 million euros.

Gross margin percentage fell to 27 percent, down 3 percentage points from the year-ago period and down sequentially by 4 percentage points.

In the second quarter, the company blamed its flagging fortunes on Japan's earthquake.

In North America, third-quarter sales fell 45 percent to 121 million euros ($167.8 million) from the year-ago quarter and were down for the nine-month period by 28 percent to 466 million euros ($646.2 million).


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