Sony Ericsson posts surprise loss in its final quarter

Summary:In Sony Ericsson's final quarter of its existence, the company posts less-than-expected fourth-quarter results, partly due to the Thai floods and increased competition.

Despite Sony Ericsson's dying days as a part-Sony part-Ericsson mobile handset venture, the company posted a surprise heavy loss, partly due to toughening competition and poor conditions.

Sony Ericsson ended on a low, as the company's final quarter showed heavy losses rather than expected profits, before the company is fully rolled into Sony.

The company reported pretax losses of $316.6 million (€247 million) for the fourth quarter, compared to an expected profit, according to a Reuters poll.

Over the full year, the company slipped to a $313 million (€243 million) loss, in which half-owned Ericsson was forced to take a $160 million hit to its operating income in the final quarter.

The company said it shipped only 9 million smartphones in the fourth-quarter, down 20 percent year-on-year, and 5 percent down on the third-quarter. The fourth-quarter is often expected to do better than most others due to the holiday season in December.

Sony Ericsson's chief executive Berd Nordberg said that the company's fourth quarter results reflected "intense competition, unfavourable macroeconomic conditions," and also highlighted the effect the Thai floods has had on business, which is expected to have a continued lasting impact this year.

The world's ninth-largest handset manufacturer missed out on a boom in smartphone sales during the mid-2000's which powered the growth of Google's Android and Apple's iPhone smartphones.

Sony owns half of the joint venture, but late last year it became clear that the 10-year long pact would not be renewed. Sony is expected to take control of the phone maker this month or early February, reports suggest, and not a moment too soon. Better results are expected under the parent wing of Sony, which has better experience in selling high-margin products, including leading smartphones and gaming devices.

Sony Ericsson has previously said that it intends to stop selling its cheaper, lower performance phones in favour of competitive handsets.

Image source: CNET.

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Topics: Hardware, Mobility, Smartphones

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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