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Sony Ericsson issues profit warning

Mobile phone maker Sony Ericsson warned investors on Friday that its first quarter profits wouldn’t meet expectations, as a slump in global demand hit the company's sales and earnings.

Published: 20 March 2009 13:07 CET
Sony Ericsson issues profit warning

Sony Ericsson said that “net sales and net income before taxes in the first quarter of 2009 continue to be negatively affected by weak consumer demand as well as de-stocking in the retail and distribution channels.”

The company is due to announce its first-quarter results on April 17.

Sony Ericsson reported a net loss of €73 million ($100 million) in 2008, with the fourth quarter alone showing losses of €187 million and a drop in sales of 22 percent.

The company has announced massive cost-cutting measures.

Sony Ericsson also said it “plans to ship approximately 14 million phones during the first quarter of 2009 with an estimated average selling price of €120,” compared to the 22.3 million phones sold at an average price of €121 in the first quarter last year.

Sony Ericsson also warned that its first quarter “gross margin is expected to decline both year-on-year and sequentially.”

And its “net income before taxes is estimated to be a loss in the range of €340-390 million, (and) excluding restructuring charges in the range of €10-20 million,” it said.

The profit warning came amid several days of media speculation in Sweden that the company was considering splitting the Japanese-Swedish venture that was created in 2001.

Ericsson chief Carl-Henric Svanberg however continues to maintain that his company is committed to a long-term involvement in the joint-venture.

Sony Ericsson remains unlisted, but Ericsson saw its share price dive 7.65 percent to 70 kronor ($8.62) in midday trading on the Stockholm stock exchange, where the OMX30 index was down 1.75 percent.

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Published: 11 April 2022 19:42 CEST
Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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