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Apr-23-20082nd UPDATE: Sony Ericsson 1Q Net Profit Down 48%; Market Share Dips(topic overview)
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The company shipped 22.3 million units, a 2 per cent increase compared to the same period last year, although the average selling price of handsets dropped from Eur134 to Eur121 due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence. Dick Komiyama, president of Sony Ericsson, said, "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008." During the quarter, Sony Ericsson added a new sub-brand to its product portfolio with the announcement of the Xperia X1, a high end multi media device based on Windows Mobile, which will launch in the second half of the year. [1] Net income for the quarter was 48% lower, at Euro 133 million. "Sony Ericsson continues to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets," said Dick Komiyama, President, Sony Ericsson. "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008." During the quarter, Sony Ericsson added a new sub-brand to its product portfolio with the announcement of the XPERIA(TM) X1, a high-end multi-media convergence phone based on Windows Mobile, which will launch in the second half of the year. The company announced a number of new phones during the quarter to increase the appeal of its brand to a broader audience. These included new high-end Walkman and HSDPA web phones, such as the W980, W760, Z770 models and also added to its cutting-edge Cyber-shot(TM) range with models such as the C702 and C902. Average selling price (ASP) decreased both sequentially and year-on-year due to the impact of softer sales of high-to-mid end models in key markets.[2]
Sony Ericsson said however that it expected a recovery in the second half of the year. "Sony Ericsson continues to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets," Sony Ericsson president Dick Komiyama said in a statement. "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements duing the second half of 2008," he said. For the past year Sony Ericsson has tried to widen its product portfolio and increase its presence on new markets in order to reduce its dependence on its traditional market, Europe. The company hopes its strategy will propel it into the top trio of mobile phone makers by 2011.[3]
The company also expects to see better results. "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008," said Sony Ericsson President Dick Komiyama. The company has especially high hopes for Xperia X1, its upcoming Windows Mobile phone and iPhone competitor, which will ship during the second half of 2008.[4]
STOCKHOLM, Sweden (AP) — Mobile phone maker Sony Ericsson on Wednesday reported a 48 percent drop in first-quarter net profits, citing slower sales growth in some of its markets. Shares in the LM Ericsson AB and Sony Corp. joint venture plummeted more than 7 percent last month after it warned that falling growth in the market for mid- and high-range handsets would hurt its results in the first quarter. Despite the quarterly sales drop, Sony Ericsson said it expects the global handset market for this year to grow at a pace of about 10 percent, from more than 1.1 billion units in 2007.[5] Sony Ericsson also reported a 48 per cent drop in first quarter net profits. Despite the quarterly sales drop, Sony Ericsson expects the global handset market for this year to grow by 10 per cent, from more than 1.1 billion units in 2007. This contrasts with Nokia, which said last week that it expects a slight fall.[6]
Analysts forecast Ericsson's earnings of $0.28 per share in the quarter, on sales of $6.84 billion, and Sony's earnings of 0.15 per share, on revenues of $19.22 billion. Sony Ericsson's rival, Finnish mobile devices major Nokia Corp. (NOK) on last Thursday reported a 25% rise in its first-quarter net profit to 1.22 billion euros or 0.32 euros from 979 million euros or 0.25 euros a year ago, helped by strong mobile device volume growth primarily in emerging markets.[7] Americas region's net sales in the first quarter increased to 486 million euros from 365 million euros a year ago, while Asian net sales plunged to 722 million euros from prior year's 961 million euros. Sony Ericsson in March had noted that its first-quarter pre-tax profit and sales would be negatively impacted by moderate sales growth in its mobile phone units.[7]
Sony Ericsson has come out with their latest revenue report and the company has reported a 48 percent drop in first-quarter net profits. Sony Ericsson said that this was mostly due to slow sales in some of their global markets. The company also warned that falling growth in the market for mid- and high-range handsets would hurt its results in the first quarter. Sony Ericsson faces intense competition from both Nokia and Samsung which are enhancing their market position dominating Motorola and other players.[8] Last month, Sony Ericsson said earnings and revenue would fall in the first quarter. Last week, Nokia Oyj, the worlds biggest maker of mobile phones, reported first-quarter profit that missed analysts estimates and predicted a slowdown in the global handset market this year.[9]
Going ahead for fiscal 2008, the world's fourth-largest handset maker said it forecasts around 10% rise in global handset market. The 50/50 joint venture between Sweden's LM Ericsson Telephone Co. (ERIC) and Japan's Sony Corp. (SNE) stated that its first-quarter net income declined to 133 million euros from 254 million euros in the previous year's first quarter, and 373 million euros in the preceding fourth quarter.[7] Overall revenue lapsed 7.6% to 2.7 billion euros due to slower demand of mid-to-high end handsets. Sony Ericsson also witnessed a decline in its first quarter pretax profit to 193 million euros against company'''s own forecast range of 176 million euros.[10] STOCKHOLM, April 23 (Reuters) - Mobile phone maker Sony Ericsson said on Wednesday first-quarter pretax profit fell to 193 million euros, a sharp dive from a year ago but at the high end of the company's own forecast range.[11] STOCKHOLM, April 23 (Xinhua) -- Mobile phone maker Sony Ericsson reported on Wednesday that its sales and pre-tax earnings fell sharply in the first-quarter although the number of shipped units increased. First-quarter sales fell to about 2.7 billion euros (4.3 billion U.S. dollars), a decrease of 8 percent compared with the year-ago period due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence, Sony Ericsson said in its quarter report.[12] FRANKFURT, Germany (AP) - Volkswagen (other-otc: VLKAF.PK - news - people ) said Wednesday that improved sales helped lift its first-quarter net profit by more than 25 percent and predicted a substantial increase in demand from Asia, Europe and South America. STOCKHOLM, Sweden (AP) - Mobile phone maker Sony (nyse: SNE - news - people ) Ericsson (nasdaq: ERIC - news - people ) on Wednesday reported a 48 percent drop in first-quarter net profits, citing slower sales growth in some of its markets.[13]
STOCKHOLM (AFP) — Sony Ericsson, the Swedish-Japanese mobile phone maker, said on Wednesday its profits plunged in the first quarter as its average sale price fell due to its reorientation towards low and mid-end phones.[3] Slowing market growth for mid-range and high-end phones has hit Sony Ericsson, which during the first quarter logged a net profit of '''133 million (US$200 million), down from '''254 million during the first quarter last year.[4] The world's largest mobile phone company reported a 25% rise in net profit to '''1,22bn for 2008's first quarter but said the value of the overall global mobile device market would drop in euro terms in 2008 compared with last year because of the weak dollar and slower global economic growth.[14]
Fourth placed handset vendor Sony Ericsson made good on its earlier warnings on Wednesday, as a slowdown in market growth of mid-to-high end phones, took its toll on the company's bottom line. For the first quarter, the Japanese-Swedish joint venture took a knock that sent its net income down to Eur133m, from Eur254m in the same period last year.[1]
Shipped units in the first quarter were 22.3 million, a 2-percent increase compared with the same period last year, it added. Dick Komiyama, president of Sony Ericsson, sounded optimistic about the second half of this year. "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008," he said in the report.[12] The companys market share was also thought to have reached 8 percent in the first quarter, which it said was down 1 percentage point sequentially. Sony Ericsson President Hideki "Dick" Komiyama said his companys products have been "well received" in the quarter and that it will continue "to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets." "We expect to see a positive effect from these announcements during the second half of 2008," he said in a statement.[15] Nomura analyst Richard Windsor said the result showed that consumers, hit by an economic slowdown and lower purchasing power, are sticking with free low-end devices instead of paying for an upgrade to a more high-tech device. He said this, combined with a lack of meaningful new products to be released in the second quarter, mean there is little chance Sony Ericsson will regain lost market share. Sony Ericsson president Dick Komiyama says he expects business to pick up in the second half after new products come out.[16]
Operating margin also fell to 6.7% from prior year's 11.8%. President Dick Komiyama commented, 'Sony Ericsson continues to invest in expanding its product portfolio to appeal to a wider variety of consumers in both new and existing markets. Going ahead for fiscal 2008, Sony Ericsson said it forecasts that the global handset market will grow at a rate of around 10% from more than 1.1 billion units in 2007, with the majority of this growth expected to be in emerging markets. Sony Ericsson's parent companies Ericsson is slated to announce its first-quarter results on April 25, while Sony Corp. will report its fourth-quarter results on May 14.[7] Sony Ericsson said it still expects the global handset market to grow by about 10% in 2008, largely in fast-growing emerging markets. The forecast was in line with what industry heavyweight Nokia Corp. (NOK) said in its first-quarter report last week.[17]
The company, owned by Japan's Sony Corp. (6758.T: Quote, Profile, Research ) and Sweden's Ericsson (ERICb.ST: Quote, Profile, Research ), said first-quarter pretax profit fell to 193 million euros ($306 million) from 362 million a year earlier, hit by slower demand and component shortages. That was near the top of the range of 150 million to 200 million euros it gave in a warning last month which added gloom to a handset sector fretting about a global economic slowdown.[18] The handset-maker, which is owned by Sony (nyse: SNE - news - people ) and Swedish firm Ericsson (nasdaq: ERIC - news - people ), said on Wednesday that first-quarter pre-tax profits had almost halved over the year, down to 193 million euros ($308.1 million). Sony Ericsson is still having trouble detaching itself from its European stronghold, where it gets the most demand for its high-end products.[19] STOCKHOLM (Thomson Financial) - Sony Ericsson Mobile Communications AB reported a first-quarter profit after financials of 193 million euros, down 47 percent from a year earlier, but above market expectations of 176 million, as recorded by SME Direkt.[20]
The number of units shipped by Sony Ericsson in the quarter was 22.3 million, an increase of 2 percent from a year earlier. Sony Ericsson said it made a dividend payment of 470 million euros during the quarter to its parent companies. It said a second dividend will be paid later this year.[21]
Sales for the quarter were Euro 2,702 million, a decrease of 8% on a year ago due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence.[2] The company's quarterly net sales, as expected, declined 8% to 2.70 billion euros from prior year's sales of 2.93 billion euros, due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence.[7]
SonyEricsson (NSDQ: ERIC) sales collapsed to 2.7 billion euros ($4.3 billion) in Q1 - down eight percent from 2.92 billion euros in the year-ago period and 3.77 billion euros in the preceding quarter - thanks to " slowing market growth in mid-to-high end phones ". Pre-tax profit also fell 47 percent to 193 million on higher R&D costs (the company will shortly launch its Xperia X1 Windows Mobile multimedia phone).[22] First-quarter net income fell to 133 million euros ($212 million) from 254 million euros a year earlier, while sales slipped 7.6 percent to 2.7 billion euros, the London-based company said today in a statement.[23] First-quarter sales fell to 2.7 billion euros ($4.3 billion), compared with 2.9 billion euros in the year-ago period. Shipped units, which it had already warned would be lower this quarter, reached 22.3 million, more or less in line with the predicted 22 million units. Because of the softer sales, the average selling price of high-to-mid end models in its key markets has dropped both sequentially and year-on-year, it said.[5] Average handset selling price fell from 134 euros last year to 121 euros "due to the impact of softer sales of high-to-mid end models in key markets". In the earnings call, the company refused to detailwhichmarkets - and this is still high compared to Nokia (NYSE: NOK) phones. Coupled with Nokia's forecast last week of a shrinkage in the mobile market this year, it sounds like tough times ahead.[22] Sony Ericsson, the world's fourth-biggest mobile phone manufacturer, sold 22.3 handsets during the period at an average selling price of 121 euros, compared to 21.8 million at 134 euros last year.[3] The average selling price (ASP) of Sony Ericsson's handsets fell to 120 euros from 134 euros a year earlier and from 123 euros in the fourth quarter.[21] Nokia is the global market leader, followed by Samsung Electronics (005930.SE) and Motorola Inc. (MOT). Sony Ericsson said the average selling price of its devices slipped to EUR121 compared with EUR134 a year earlier, and it is expected to fall further in coming quarters.[17]
'In the second quarter were are expecting a component shortage,' said Komiyama at Sony (nyse: SNE - news - people ) Ericsson (nasdaq: ERIC - news - people )'s post results conference call. He said the company is looking to add an additional supplier but he doesn't expect it to be able to fully meet its supply requirements until the middle of the third quarter. Even with an additional supplier, chief financial officer Ulf Lilja said he sees component prices continuing higher, and for average selling prices to continue falling. As such he said the company is working to reduce its broader cost base to compensate.[24] STOCKHOLM (Thomson Financial) - Sony Ericsson Mobile Communications AB president Dick Komiyama said the company's cost base was adversely affected in the first quarter by higher component prices due to shortages, and he expects more of the same in the second quarter.[24] Sony Ericsson, posted a 48 percent drop in its first quarter profit due to slower sales, higher research and development costs and shortage of component.[10] LEHIGH VALLEY, Pa. (AP) _ Industrial gases and equipment supplier Air Products & Chemicals Inc. said Wednesday it expects 2008 profit above Wall Street estimates and fiscal third-quarter profit to rise 12 percent to 16 percent. DALLAS (AP) _ Lennox International Inc., a supplier of heating, ventilation and air conditioning products, on Wednesday cut its 2008 revenue guidance, but said it will meet its profit expectations through cost reductions. STAMFORD, Conn. (AP) _ Silgan Holdings Inc., a packaging manufacturer, on Wednesday backed its full-year profit outlook and forecast second-quarter profit higher than a year ago. BROOMFIELD, Colo. (AP) _ Level 3 Communications Inc. reiterated its 2008 financial targets after sales picked up in the first quarter, the Internet network provider said Wednesday.[25]
The operating margin fell to 6.7 percent from 11.8 percent a year earlier, while the gross margin fell to 29.2 percent from 30.3 percent, reflecting, the company said, the 'less favourable product mix'. The company said its market share was around 8 percent in the first quarter, down 1 percentage point sequentially.[21]
The company'''s net profit fell to 133 million euros ($212 million) as compared to $254 million euros in the first quarter of 2007.[10] Net profit for the three-month period that ended March 31 came to 133 million euros ($212 million), down sharply from 254 million euros in the same quarter last year.[5]
In the first three months of the year, the group registered a net profit of 133 million euros (212 million dollars), down by 47.6 percent from 254 million euros a year earlier.[3]
Sony Ericsson, owned by Ericsson (ERICb.ST: Quote, Profile, Research ) and Sony Corp. (6758.T: Quote, Profile, Research ), had warned markets last month that pretax profit would be between 150 million euros and 200 million euros, a steep fall from the 362 million euros earned a year earlier.[11] The results were at the upper end of Sony Ericsson's lowered guidance issued last month for profit after financials in a range of 150 million to 200 million euros.[21] The results were in line with Sony (nyse: SNE - news - people ) Ericsson (nasdaq: ERIC - news - people )'s profit warning of last month in which it said pretax profit would be in the range of 150 million to 200 million euros.[20]
Analysts in a Reuters survey after the earnings warning -- which added to gloom in the whole handset sector and knocked co-parent Ericsson's shares -- had forecast pretax profit of 176 million euros.[11] Following the warning, analysts in a Reuters survey had forecast a profit of 176 million euros. "The component shortages are disappointing as they compounded an already challenging quarter," said Ben Wood, research director at CCS Insight.[26]
Income before taxes was 193 million euros, 47% lower than 362 million euros a year ago, and 501 million euros in the fourth quarter. The first-quarter income before taxes was at the higher end of its previous forecast in the range of 150 million euros - 200 million euros.[7] Income before taxes for the quarter was 193 million euros, a decrease of 47 percent compared with a year ago, due to higher R&D; investments as a percentage of sales, the report said.[12] Income before taxes for the quarter was Euro 193 million, which was at the higher end of the range (Euro 150-200 million) we announced on March 19, 2008. This represented a decrease of 47% compared with a year ago, due to higher R&D; investments as a percentage of sales, and reflecting that Q1 2007 was a particularly strong first quarter for the company.[2]
Average sales price in the first quarter fell 10% to 121 euros from last year's 134 euros, while prior quarter's selling price was 123 euros.[7] A decrease in average selling price didn't help either, as prices decreased sequentially and year-on-year. During the first quarter, customers paid an average of '''121 per phone, while during the beginning of last year they paid '''134.[4]
The average selling price fell to 121 euros per phone from 134 euros a year earlier and 123 euros the previous quarter.[23]
The average selling price of Sony Ericsson's handsets fell to 120 euros from 134 euros, but was also in line with market consensus.[20]
"The first-quarter results are better than expected," said Jan Ihrfelt, analyst with Swedbank, "but we do not see that it is sustainable." He told Forbes.com that Sony Ericsson did not have any upcoming new products that would revive flagging sales in the short term, while the company would also suffer from the rising cost of some handset components.[19] Despite Nokia's confidence and strong profitability, analysts have been fretting over Texas Instruments' comments on 3G order cancellations and Sony Ericsson's recent warning on handset sales, among other factors. Analysts have expressed concerns over Nokia's product cycle, particularly its high-end handsets, which face intense competition from Samsung, Sony Ericsson and Apple's iPhone, according to Citigroup.[14]
As with other mobile handset manufacturers in recent weeks, including market leader Nokia, Sony Ericsson blamed lower handset prices and slower than anticipated sales of smartphones and multimedia handsets for the decline.[27] April 23 (Bloomberg) -- Sony Ericsson Mobile Communications Ltd., the world's fourth-largest mobile-phone maker, reported a third straight drop in profit on slower handset sales, higher research costs and a component shortage.[23] STOCKHOLM (Reuters) - Sony Ericsson posted a 47 percent dive in first-quarter profits on Wednesday, slipping a spot to fifth among mobile phone makers as demand slowed in Europe for more expensive camera and music handsets.[26]
Sony Ericsson shipped 22.3 million mobile phones in the quarter, up from 21.8 million units a year earlier.[9] The mobile phone maker, a joint venture of Sony (SNE) and Ericsson (ERIC), reported 2.7 million Euros ($4.3 billion) of revenue, down 7% from 2.9 million Euros during Q1 2007.[16] Having sold over 100 million phones in 2007, Sony Ericsson is currently one of the five largest mobile phone manufacturers in the world.[2] Sony Ericsson has continuing problems to secure sufficient components to secure the production of its mobile phones.[28]
Mobile handset-maker Sony Ericsson made the best of a bad quarter on Wednesday, delivering a profits drop that was not quite as steep as some had expected. The company is not out of the woods yet, with declining sales and a weak consumer environment hurting its potential.[19] As expected, Sony Ericsson's Q1 was terrible: Sales and profits dropped as people favored cheaper phones and the company jacked up its R&D; spending.[16]
The company blamed the weak quarter on "slowing market growth in mid-to-high-end phones in markets where Sony Ericsson has a strong presence."[16] The company blamed'slowing growth in mid- to high-end phones in markets where Sony Ericsson has a strong presence' for the decline.[21]
STOCKHOLM -- Sony Ericsson, the world's fourth-largest mobile-phone maker, said first-quarter profit fell 48%, weighed by slowing market growth.[29]
Stockholm - Mobile telephone maker Sony Ericsson on Wednesday posted lower turnover and a 47-per-cent drop in pre-tax income for first quarter 2008.[30] Sony Ericsson said it sold 22.3 million handsets during the quarter, compared to the 30.8 million handsets sold during the fourth quarter of 2007 and 21.8 million units sold during the first quarter of 2007.[30] Sony Ericsson's marketshare for the first quarter was around 8 percent, down from 9 percent in the fourth quarter of last year, but about the same year-on-year.[22] LG Electronics on April 16 said that mobile-phone shipments jumped 54 percent to a record in the first quarter, indicating it may have leapfrogged Sony Ericsson as the fourth-largest vendor.[9]
Sony Ericsson made a dividend payment of Euro 470 million during the quarter to the parent companies. A second dividend payment will be made this year.[2] "As LG announced 24.4 million (units) the other day we now know that it overtook Sony Ericsson, but I remain positive about Sony Ericsson's potential in the second half of 2008," said Gartner analyst Carolina Milanesi.[4]
Sony Ericsson estimated that the global handset market in 2008 would grow around 10 per cent from more than 1.1 billion units in 2007.[30] The company expects sales from emerging markets to grow the global handset market by average rate of 10 per cent in 2008.[27]
The global mobile handset market will shrink in value in euro terms this year for the first time, industry leader Nokia warned Thursday. This unexpectedly bleak assessment sent its shares nearly 13% lower.[14] Nokia also continues to expect some decline in industry ASPs in 2008, primarily reflecting the growing impact of emerging markets and competitive factors in general. The company continues to target an increase in its market share in mobile devices in 2008. Another peer Motorola Inc. (MOT) is slated to release first quarter earnings on Thursday, April 24.[7] The company sees adjusted loss from continuing operations in the range of $0.05 - $0.07 per share for the first quarter.[7] The Street analysts are of the view that the company would incur a loss of $0.07 per share in the quarter, with sales totaling $7.76 billion.[7]
Excluding special items, the company's earnings per share were 0.38 euros, higher than 0.26 euros in the same quarter of last year.[7]
Among regions, Europe, Middle East & Africa generated net sales of 1.49 billion euros, lower than 1.60 billion euros in the previous year. Among this, Western Europe net sales fell to 979 million euros from 1.08 billion euros last year.[7] Analysts surveyed by Stockholm-based researcher SME Direkt had estimated net income of 118 million euros on sales of 2.6 billion euros.[23]
Nokia's quarterly net sales were 12.66 billion euros, a 28% increase from 9.86 billion euros in the previous year.[7]
At constant currency, group net sales rose 35%. Nokia also affirmed its 2008 industry mobile device volume growth outlook of about 10% from the approximately 1.14 billion units it estimated for 2007.[7] Certain component shortages for popular mid-priced phones have contributed to the modest unit sales growth in the first quarter.[7] Sales in Asia fell 24.9% in the first quarter, when compared with last year, which is not a good sign given that Western markets are also hurting from a wider slowdown in consumer spending.[19] The year-over-year fall reflected higher Research and development investments as a percentage of sales, while the prior year first quarter was a particularly strong quarter for the company.[7]
In March, the group announced that it had expected lower sales and profits in the first quarter amid slowdown in demand.[30]
Net profit for the first-quarter fell to EUR133 million from EUR254 million, while sales slid to EUR2.70 billion compared with EUR2.93 billion in the year- earlier period.[17] Net profit for the three-month period that ended March 31 came to 133 million (US$212 million), down sharply from 254 million in the same quarter last year.[15]
The company had earlier warned the market about a steep fall in the pretax profit between 150 million euros and 200 million euros as compared to the previous year.[10] Profits fell to 133 million Euros ($213 million) from 254 million Euros a year ago.[16]
Operating income was 181 million euros, down 48% from 346 million euros last year.[7] Pre-tax income for the quarter was 193 million euros (307 million dollars), compared to 362 million euros for the corresponding period in 2007.[30]
Units shipped in the quarter were 22.3 million, a 2% increase compared to the same period last year and in line with our March 19, 2008 interim announcement of 22 million units.[2] Phone sales increased to 22.3 million units, a jump of 500,000 compared to a year ago. That was not enough for Ericsson to remain the fourth largest phone vendor in the world.[4] Sales were down by 8 percent, to '''2.7 billion, compared to '''2.9 billion last year. The bad news was expected, since the company issued a warning earlier this year.[4] For the quarter, Nokia reported that net sales rose 28% to '''12,7bn, compared with the same quarter last year.[14]
The company's first-quarter gross margin declined to 29.2% from 30.3% last year, reflecting a less favorable product mix. It was expected to remain relatively stable compared to the prior-year quarter.[7] Quarterly shipments increased from last year. The company said it expects its recent product announcements will make a positive effect during the second half of 2008.[7] "Demand for high-end products has seen some impact from weaker consumer spending," said Jan Dworsky, analyst with Handelsbanken Capital Markets. He told Forbes.com that competitors were also encroaching on the handset-maker's preferred territory, with Nokia (nyse: NOK - news - people ) making inroads in the music-phone market. He added that he expected a positive effect from new products in the second half of 2008.[19]
FRANKFURT, Germany (AP) - Semiconductor maker Infineon Technologies AG (nyse: IFX - news - people ) on Wednesday reported a wider second-quarter loss because of a weak performance from memory-chip unit Qimonda AG (nyse: QI - news - people ). It was Infineon's fifth consecutive quarterly loss. MINNEAPOLIS (AP) - Hair salon operator Regis Corp. said Wednesday its third-quarter profit more than tripled on price increases and higher same-store service sales.[13] Shipped units, which it had already warned would be lower this quarter, reached 22.3 million, more or less in line with the predicted 22 million units. Because of the softer sales, the average selling price of high-to-mid end models in its key markets has dropped both sequentially and year-on-year, it said.[15] In fourth quarter 2007 the average selling price was 123 euros while in first quarter 2007 it was 134 euros.[30]
Group turnover was 2.7 billion euros, down 8 per cent on the first quarter 2007, the group said.[30] In the sequential fourth quarter, the company recorded sales of 3.77 billion euros.[7] Sales fell 8 percent to 2.702 billion euros, but were slightly above market expectations of 2.642 billion.[20] Sales dipped by 7.6 percent in terms of value to 2.7 billion euros during the period.[3]
Chief financial officer Rick Simonson told a conference call that 50% of Nokia's sales were in dollars or dollar-linked. "There is growth in this market in volume and value if you knock out this crazy currency," he said. Nokia still expects the number of phones sold industry-wide to grow 10% in 2008 but these sales are expected to generate less revenue for vendors as average sale prices per phone fall. [14] Sales were down eight per cent to E2.7 million, due to slowing market growth in mid-to-high end phones.[6]
As per previous reports by the UK-based research firm Gartner, Inc. (IT), growth in the sales of mobile devices to end users will slow down in 2008. It will also decline to about 10% growth as mature markets become more saturated.[7]
Gartner projects that the global mobile devices market is likely to remain relatively immune to the recession in the U.S. and Western European economies as the majority of the 2008 growth will come from emerging markets.[7]
The handset maker sold over 100 million phones in 2007, including the highly successful Walkman and Cuber-shot brands. In February it added its first Windows Mobile device, the XPERIA X1. It will launch later this year, along with the Walkman W980 and W760, and the Cyber-shot C702 and C902.[6] The drop in sales, which was expected after the group issued a profit warning in March, was attributed to shrinking demand for mid- and high-end mobile phones on the company's main market, Europe, amid an economic slump.[3] MALIBU, Calif. (AP) - Toy maker Jakks Pacific Inc. said first-quarter earnings fell 73 percent, missing Wall Street estimates, as legal, product testing, and restructuring costs ate into profit. STOCKHOLM, Sweden (AP) - Swedish aerospace and defense company Saab AB said Wednesday its first-quarter profit fell 11 percent, mainly with marketing costs promoting its Gripen fighter jets weighing on the results.[13]
The G502 will be Sony Ericsson's lowest-priced HSDPA phone yet -- although the company won't say how much it will cost. It will bring the Web to a mainstream audience, said Sony Ericsson.[4] There will still be a shortage in the second quarter of 2008, said Dick Komiyama, CEO of Sony Ericsson at a web conference covering the quarterly financial report on Wednesday. Legal Notice This article has been edited and published by Evertiq New Media AB. Copying or re-publishing of this news item without permission from Evertiq New Media AB may lead to prosecution. The same applies for the headline.[28] Sony Ericsson chief executive Dick Komiyama said the group hoped to benefit from recently launched handsets in the coming quarter.[30]
The Nokia 5320 XpressMusic will be priced at '''220, and ship during the third quarter. "HSDPA is being deployed much faster than people anticipated, and both Nokia and Sony Ericsson are committed to drive it into their portfolio," said Milanesi.[4] Although it has been a difficult quarter, Sony Ericsson can be optimistic that it is on the right track in the long term."[22]
Sony Ericsson was established as a 50:50 joint venture by Sony and Ericsson in October 2001, with global corporate functions located in London.[2] XPERIA(TM) is a trademark of Sony Ericsson Mobile Communications WALKMAN and Cyber-shot(TM) are trademarks or registered trademarks of Sony Corporation.[2] Sony Ericsson, which is not listed on the stock exchange, is a joint venture between Japanese electronics giant Sony and Ericsson of Sweden.[3] Sony Ericsson plans to take on more component suppliers in Q2/08 to meet the increased demand, e24 reports.[28] Sony Ericsson cited higher research and development costs as one source of greater operating expense, coupled with a €470m dividend payment to parent companies.[27]
Except Sony (NYSE: SNE) Ericsson is forecasting 10 percent growth, thanks to emerging markets.[22] For a detailed description of risk factors see Sony's and Ericsson's filings with the U.S. Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.[2]
In the first quarter, the group also suffered from a shortage of parts for the company's much in demand mid-end phones. [3] The first quarter of the year is always very busy in the telephone industry.[22]
Number of units shipped in the quarter was 22.3 million, 2% higher than 21.8 million in the previous year, and in line with previous forecast of 22 million units.[7] Pretax profit was €193 million, compared with €362 in the year-earlier quarter, within the €150 million to €200 million range it forecast in a March 19 profit warning.[29]
Units shipped in the quarter remained flat at 22.3 million devices, two per cent up on Q1 2007.[27] The group's share of the global market was estimated at 8 per cent, down 1 percentage point on fourth quarter 2007.[30] The operating margin rose year-on-year from 13,6% to 14,7% but dropped from 15,9% in the fourth quarter of last year. Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.[14]
Revenue was '2.7bn, a drop of 8% from a year ago, and operating income was '181m, down 48% on Q1 07. The volumes were affected by lower demand caused by inventory build up in the channels around Christmas, plus strong competition from other vendors' high-end offerings (Nokia N95 8GB, LG Viewty, iPhone and others) as well as component shortages on two of its best-selling models. About: This article is an extract taken from Ovum's EuroView Daily Comment service. Providing our expert's views and opinion of the important news and events in European IT & Telecoms, this daily email bulletin is a component of Ovum's EuroView advisory service.[31] Net income in the period declined to €133 million ($212.7 million) from €254 million a year earlier.[29] Net income was down 48 per cent as a result, dropping to €133m for the quarter.[27]
The results were broadly in line with a profit warning it issued last month which signalled an end to a long string of bumper quarterly results and market share gains. "We see that the demand on the high-end has softened," Anders Runevad, head of sales, said on a conference call, adding that consumers were becoming more careful about their spending. [26] First-quarter sales fell to 2.7 billion (US$4.3 billion), compared with 2.9 billion in the year-ago period.[15] In a period when sales growth is soft, the company said maximizing efficiency will be crucial.[17] New president Dick Komiyama, in the call: "The industry still has a good potential for growth and our challenge is to ensure that we have the right product at the correct price.[22]
The company projects the mobile device market to decline in value in Euro terms in 2008, compared to 2007. [7] The first-quarter unit shipment was lower than 30.8 million in the fourth quarter.[7]
SOURCES
1. telecoms.com
2. Sony Ericsson continues to invest for future growth
3. AFP: Sony Ericsson sees profits halved in first quarter
4. Sony Ericsson takes a profit hit, launches phones | The Industry Standard
5. The Associated Press: Slowing sales drag Sony Ericsson 1Q down 48 percent
6. Sony Ericsson shipments up, profits down - news - www.mobile-ent.biz
7. Sony Ericsson Q1 Profit Falls On Lower Price; Shipments Rise 2%; Expects Around 10% Rise In FY08 Global Handset Market - Update [ERIC] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
8. Sony Ericsson profit drops on slowing sales
9. Sony Ericsson posts 3rd straight drop in profit - International Herald Tribune
10. Sony Ericsson Q1 profit down by 48% on slower handsets sales
11. Sony Ericsson Q1 pretax beats consensus forecasts | Industries | Consumer Goods & Retail | Reuters
12. Sony Ericsson sales, income fell in Q1_English_Xinhua
13. Earnings roundup: Volkswagen, Sony Ericsson - Forbes.com
14. Nokia flags slowdown in mobile market at FM Tech
15. Sony Ericsson says 1Q net profit fell 48 percent, sales were lower - International Herald Tribune
16. Sony Ericsson Stinks Up Q1 As Sales, Profits Shrink - Silicon Alley Insider
17. 2nd UPDATE: Sony Ericsson 1Q Net Profit Down 48%; Market Share Dips
18. Sony Ericsson Q1 pretax dives 47 pct | Markets | Markets News | Reuters
19. Sony Ericsson Under Pressure - Forbes.com
20. Sony Ericsson Q1 profit falls 47 percent but beats consensus - Forbes.com
21. Sony Ericsson Q1 headline profit falls 47 percent but beats consensus UPDATE - Forbes.com
22. Earnings: SonyEricsson Q1 Collapses On R&D; Costs, Lower HighEnd Sales - washingtonpost.com
23. Bloomberg.com: Europe
24. Sony Ericsson's president Komiyama sees continued component shortages in Q2 - Forbes.com
25. Outlook roundup: Air Products & Chemicals, Lennox Int'l | Chron.com - Houston Chronicle
26. Sony Ericsson first quarter pretax dives | Reuters
27. Sony Ericsson income down 48 per cent - 23 Apr 2008 - Computing
28. Sony Ericsson suffers from lack of components :: evertiq.com
29. Free Preview - WSJ.com
30. Sony Ericsson first quarter turnover and profits shrink - Business
31. Telecoms and Software News
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