For the second quarter ending June 30, it posted net income of 89m euros ($110m), compared with a net loss of 88m euros ($109m) in the year-ago quarter. It also posted a pre-tax profit of 113m euros ($139.6m), compared with a loss of 102m euros ($126m) a year ago.
The good news was also reflected in its sales, with revenue up 34% (ahead of market expectations) at 1.50bn euros ($1.86bn) from 1.1bn euros ($1.36bn) a year ago.
This is the fourth consecutive quarter that the 50:50 joint venture between LM Ericsson of Sweden and Japan’s Sony has posted a profit. Before that, the venture had been losing money since it was established back in 2001.
The turnaround in the company’s fortunes has been mainly due to the strong demand for its camera phones, and during the quarter it shipped a total of 10.4 million mobile handsets, a 55% increase from the same period last year when it shipped 6.7 million units. This was up from a consensus forecast of 9.2 million units.
Sony Ericsson’s improving fortunes also appear to be tied to lower priced phones, after its average selling price decreased sequentially to 145 euros ($179) from 152 euros ($187) the quarter before.
Sony Ericsson is currently the world’s fifth largest maker of handsets, with about 7% of the market. Finland’s Nokia is the biggest with 28.9%, followed by US-based Motorola with 16%, South Korea’s Samsung with 13%, and Germany’s Siemens with 8%.
Looking forward, Sony Ericsson revised its global handset sales forecast upwards, reflecting the more confident mood in the industry. It now believes that during 2004, a total of 600 million handsets will be shipped worldwide, up from its previous forecast of 550 million. This new figure is still conservative compared to industry estimates of 615-650 million units.
Sony Ericsson also benefited from a number of new phones that started shipping towards the end of the second quarter, including the company’s first UMTS 3G phone, the Z1010. The K700, a high-end multimedia phone for GSM markets, and the premini, a very small PDC phone for NTT DoCoMo in Japan, also started shipping.
Meanwhile, the company also announced a slew of new mobile handsets. The P910 is being targeted at mobile business professionals. It features a keyboard and stylus, and 64MB of internal memory, and lets users send and receive email, browse the internet, and use it as a personal digital assistant.
The latest camera phone, the K500, is designed to look like a phone on one side and a camera on the other. Another two new camera phones, the S710a and Z500, take advantage of EDGE technology, which provides fast access to wireless data, content downloads, messaging, and interactive online gaming.
