SonyEricsson Posts Lower Q1 Profits

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London - SonyEricsson posted its fifth consecutive quarterly profit in its first quarter ending March 31, but both its net and operating profits were down.

Net profit fell 47.6 percent, to 11 million euros ($16 million) while operating profit declined by 5 percent year-over-year, to 19 million euros ($27 million).

Worldwide dollar sales for the quarter were off 18.5 percent to $1.15 billion euros ($1.64 billion) compared to the year-ago quarter. Worldwide unit shipments fell 23 percent to 8.1 million. Sales in the Americas were down 25 percent to $151 million euros ($216 million).

SonyEricsson attributed declining unit and dollar sales to its continuing focus on higher priced, higher margin smartphones, its declining emphasis on feature phones, and the launch of new products at the end of the quarter instead of earlier in the quarter. Smartphones' share of total dollar sales more than doubled in the quarter compared to the year-ago period, accounting for more than 60 percent of first-quarter sales.

Because more than 60 percent of first-quarter sales came from smartphones in the quarter, the average handset selling prices rose 5.2 percent in the quarter to 141 euros ($202), and gross margins rose to 33 percent from a year-ago 31 percent, the company said.

President/CEO Bert Nordberg noted that the Japan earthquake "made it a challenging quarter operationally, and we are experiencing some disruptions to our supply chain." The company is continuing to evaluate the situation, he said.


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