- Source: Global Times
- [04:50 April 20 2011]
Booming smartphone demand and cost cuts kept cellphone venture Sony Ericsson in the black in the first quarter as it battled supply disruptions from Japan's earthquake and tsunami.
"The Japan earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain," Chief Executive Bert Nordberg said in a statement.
Sony Ericsson posted a pretax profit of 15 million euros ($21.31 million), beating an average analyst forecast for a loss of 24 million, but within a wide range of estimates. Revenue missed forecasts as Sony Ericsson sold just 8.1 million phones in the quarter, below all expectations, and giving it market share of just over 2 percent, the lowest level since the venture was formed 10 years ago.
"These results point to a significant and ongoing impact on Sony Ericsson's supply chain and operations caused by the Japan earthquake with shipments falling a considerable way short of expectations," said CCS Insight analyst Geoff Blaber.
"This is a challenging situation for Sony Ericsson, but with lowered operating expenses and continued improvement to gross margin, it is at least in a better position to weather the storm than it was 12 to 24 months ago," Blaber said.
Sony Ericsson said in early April the March 11 quake, which hit component supplies for electronics firms around the globe, was limiting volumes in its new smartphone offerings.
Analysts have said this makes 2011 another tough period for the 50-50 venture of Sony and Ericsson, which only returned to profit a year ago after seven straight quarters of losses.
Reuters
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