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SONY ERICSSON

Sony Ericsson issues warning on second quarter results

Mobile phone maker Sony Ericsson warned on Friday that its second-quarter results would be dented by a difficult commercial environment.

“Difficult market conditions are going to have a (negative) impact on sales and profits in the second quarter,” the group said in a statement.

Sony Ericsson said it was likely to have sold 24 million phones in the April-June period, up from 22.3 million in the first quarter, but at an average price of €115 ($181) rather than €121.

The group has for the past year has been trying to develop its business on emerging markets in order to reduce dependence on its traditional European outlets.

Sony Ericsson, which is not quoted on the stock market, was formed through the merger of Ericsson of Sweden, world leader in mobile phone networks, and Japanese electronics giant Sony.

SONY

Ericsson profits double on sale of Sony stake

The Swedish telecommunications equipment maker Ericsson posted Wednesday a first quarter net profit that was more than double the level recorded a year earlier, owing to a major one-off divestment.

Ericsson profits double on sale of Sony stake

The world leader in mobile telephone networks also said sales had fallen by four percent to 50.97 billion kronor ($7.6 billion), while operating profit excluding the sale of its half the joint venture Sony Ericsson was 56 percent lower at 2.8 billion.

Net profit leapt however by 116 percent to 8.8 billion kronor thanks to a 7.7 billion kronor contribution from the sale of a 50-percent stake in Sony Ericsson, a statement said.

Meanwhile, “sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker,” chief executive Hans Vestberg said.

Cheuvreux analyst Odon De Laporte highlighted an increase in Ericsson’s gross margin since the fourth quarter of 2011.

Gross margin is the percent of total sales that a company retains after taking into account the cost of their production and associated services.

“Sure, the report shows there is low activity, especially for the network division, but seeing the gross margin bouncing back is definitely a relief,” Laporte was quoted by Dow Jones Newswires as saying.

Ericsson’s gross margin climbed to 33.3 percent in the first three months of the year, from 30.2 percent in the fourth quarter of 2011, but remained below the 2011 first quarter level of 38.5 percent.

On February 16, Sony said it had finalised the acquisition of Ericsson’s share of their mobile telephone joint venture Sony Ericsson, which was renamed Sony Mobile Communications.

The transaction, which had a total value of 1.05 billion euros, included patents and licenses.

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