Sony Ericsson reports First Quarter Results

Sony Ericsson reports First Quarter Results

Tokyo and Stockholm, April 15 — Sony and Ericsson today announced the consolidated financial summary for the first quarter ended March 31, 2005 of Sony Ericsson Mobile Communications AB (Sony Ericsson), the 50:50 joint venture of Sony and Ericsson.

Q4 2004 and Q1 2005 IBT includes consolidation of BMC and Net Income includes deduction of minority interest in BMC 1)
** Q4 2004 Net Income includes a negative effect of a valuation allowance on deferred tax assets of Euro 45 million

Units shipped in the quarter reached 9.4 million, a 7% increase compared to the same period last year. Sales for the quarter were Euro 1,289 million, representing a year on year decrease of 4%. Income before taxes was Euro 70 million and net income was Euro 32 million, which represent year on year decreases of Euro 27 million and Euro 50 million respectively.

In line with expectation, market growth was moderate during the quarter. As a result of more normal seasonality the market declined sequentially. The Western European market declined slightly and witnessed a shift to pre-paid products, while general inventory build up in the sales channels during Q4 spilling over into the first quarter created a more competitive market environment than a year ago.

Sony Ericsson’s decrease in average selling price (ASP) was partly due to the general market conditions outlined above, but also because the product line-up was mature and few new products were launched during the period. The company continued investment in product portfolio and brand development, while maintaining gross margins.

“The exciting and innovative products we announced during the first quarter have been well received and will give us a stronger portfolio during the rest of the year,” said Miles Flint, President of Sony Ericsson. “We believe there is good growth potential in the market, both from new subscribers and from consumers who are upgrading their mobile phones, so the increased investments we are making now will build our brand and strengthen our product portfolio so we can continue to excite consumers.”

Read the complete Press Release