Sony Ericsson makes shock loss before ownership change

Monday, 23 January 2012 00:00 - - {{hitsCtrl.values.hits}}

(Reuters): Sony Ericsson last week posted a shock loss due to tough competition, the global slowdown and restructuring, marring the final quarter before it is rolled into Japanese consumer giant Sony.

The world’s ninth-biggest handset maker missed out on the smartphone boom which powered the growth of rivals like Apple Inc and Samsung Electronics and is now being hit by the slowdown in global growth.

Analysts say the phone maker will fare better under Sony, the maker of the PlayStation game console, Bravia TVs and Vaio computers, which aims to integrate phones with its other consumer electronic products.

Sony Ericsson reported a pretax loss of 247 million euros ($316.57 million) for the fourth quarter versus a forecast for a small profit in a Reuters poll.

For the full year, the company slipped to a 243 million euro loss, forcing 50 per cent parent Ericsson to say it would take a 1.1 billion crowns ($160.32 million) hit to its operating income in the fourth quarter.

“Our fourth quarter results reflected intense competition, unfavourable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter,” Sony Ericsson CEO Bert Nordberg said in a statement.

The company said it shipped just nine million units in the fourth quarter, down 20 per cent on last year, with smartphone shipments failing to compensate for falling feature phone sales.

Although the company will shift all its production to smartphones during 2012, feature phones still make up some 20 per cent of Sony Ericsson’s sales volumes.

Sony aims to take full control of the phone maker later this month or early February.

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