SOURCE: Ericsson

October 15, 2010 01:29 ET

Sony Ericsson reports third quarter 2010 results

STOCKHOLM, SWEDEN--(Marketwire - October 15, 2010) -



Q3 Highlights:

* Turnaround continues with third consecutive quarter of profits

* Continued success of smartphone portfolio keeps ASP at high level

* Launch of Xperia™ models in new markets, including China and the U.S.


The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the third quarter ended September 30, 2010 is as follows:

                                               Q3 2009   Q2 2010   Q3 2010

Number of units shipped (million)                 14.1      11.0      10.4

Sales (Euro m.)                                  1,619     1,757     1,603

Gross margin (%)                                   16%       28%       30%

Operating income (Euro m.)                        -193        36        63

Operating margin (%)                              -12%        2%        4%

   Restructuring charges (Euro m.)                   2        32         4

   Operating income excl. restructuring charges   -191        68        67
(Euro m.)

   Operating margin excl. restructuring charges    -12%        4%        4%
(%)

Income before taxes (IBT) (Euro m.)               -199        31        62

   IBT excl. restructuring charges (Euro m.)      -198        63        66

Net income (Euro m.)                              -164        12        49



Average selling price (Euro)                       114       160       154


Bert Nordberg, President & CEO of Sony Ericsson commented, "Our third consecutive quarter of profitable results illustrates that Sony Ericsson's overall performance is stabilising. Our strategy to focus on the smartphone segment is succeeding and smartphones now comprise more than 50% of our total sales. During the quarter, we launched our Android-based Xperia™ models in new markets, such as China and the U.S., and it is our ambition to become the global number one handset provider on the Android platform."

Income before taxes for the quarter excluding restructuring charges was a profit of Euro 66 million following the positive effects of the transformation programme. Net income for the quarter was Euro 49 million, an increase of Euro 213 million year-on-year and of Euro 37 million sequentially.

The gross margin percentage was 30% and almost doubled year-on-year, reflective of the company turnaround.

Units shipped in the quarter were 10.4 million, a decrease of 26% year- on-year and down 5% sequentially. Average selling price (ASP) in the quarter remained at a high level of Euro 154, a 34% increase year-on-year and a decrease of 4% sequentially, due to product and geographical mix. As a result, sales for the quarter were Euro 1,603 million, essentially flat year-on-year and a 9% decrease sequentially.

Sony Ericsson's net cash position as of September 30, 2010 was Euro 538 million. The negative cash flow from operating activities was Euro 54 million, mainly due to payments during the quarter related to the transformation programme.

Market share in unit base for the quarter remained flat sequentially and is estimated to be approximately 4%. The value market share is estimated to be approximately 6%.

Sony Ericsson maintains a forecast of slight growth in units in the global handset market in 2010.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia™ is a trademark of Sony Ericsson Mobile Communications AB. Sony is a registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not expressly granted herein are reserved and subject to change without prior notice.

EDITOR'S NOTES:

Financial statements and additional information:

Financial statements:
Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
Net sales by market area by quarter


Sony Ericsson is a 50:50 joint venture by Sony and Ericsson established in October 2001, with global corporate functions located in London and operations in all major markets. Sony Ericsson's vision is to become the industry leader in Communication Entertainment; where new styles of communicating through the internet and social media, become entertainment. Sony Ericsson offers exciting consumer experiences through phones, accessories, content and applications. For more information please visit, www.sonyericsson.com.

- ENDS -



This press release contains forward-looking statements that involve inherent risks and uncertainties. Sony Ericsson has identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see Sony's and Ericsson's filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F

Sony Ericsson
CONSOLIDATED INCOME STATEMENT

                                      Jul-Sep                Jan-Sep
                               ---------------------- ---------------------
EUR million                       2009   2010 Change     2009   2010 Change
----------------------------------------------------- ---------------------


Net sales                        1,619  1,603    -1%    5,038  4,765    -5%

Cost of sales                   -1,367 -1,130   -17%   -4,441 -3,371   -24%
                               ---------------        ---------------
Gross profit                       252    473    88%      597  1,394   134%

Gross margin %                   15.5%  29.5%    14%    11.9%  29.3%    17%



Research and development
 expenses                         -260   -191   -27%     -808   -625   -23%

Selling and administrative
 expenses                          -20   -228    12%     -665   -680     2%
                               ---------------        ---------------
Operating expenses                -465   -420   -10%   -1,473 -1,305   -11%



Other operating income, net         21     10   -51%       39     31   -20%
                               ---------------        ---------------
Operating income                  -193     63            -837    120

Operating margin %               -11.9%   4.0%          -16.6%   2.5%



Financial income                     3      7   124%       18     16   -12%

Financial expenses                  -9     -8   -15%      -34    -24   -29%
                               ---------------        ---------------
Income after financial items      -199     62            -853    112



Taxes                               42    -12             200    -21

Minority interest                   -6     -2   -75%      -16     -8   -48%
                               ---------------        ---------------
Net income                        -164     49            -669     82





Number of units shipped (million) 14.1   10.4   -26%     42.5   31.9   -25%

ASP (EUR)                          114    154    34%      119    150    26%







EUR million                        Jul-Sep                Jan-Sep
----------------------------------------------        ---------------
Restructuring charges             2009   2010            2009   2010
----------------------------------------------        ---------------
  Cost of sales                      0      3              -2     34

  Research and development expenses  1    -10              12     -6

  Sales and administrative expenses  1     11               4     12
----------------------------------------------        ---------------
Total                                2      4              15     39




Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

                                     2009                      2010
                         ----------------------------- --------------------
EUR million                   Q1     Q2     Q3     Q4      Q1     Q2     Q3
------------------------------------------------------ --------------------


Net sales                  1,736  1,684  1,619  1,750   1,405  1,757  1,603

Cost of sales             -1,591 -1,483 -1,367 -1,341    -975 -1,266 -1,130
                         ----------------------------- --------------------
Gross profit                 145    200    252    409     429    492    473

Gross margin %              8.4%  11.9%  15.5%  23.4%   30.6%  28.0%  29.5%



Research and development
expenses                    -303   -245   -260   -299    -216   -218   -191

Selling and administrative
expenses                    -225   -235   -205   -299    -207   -245   -228
                         ----------------------------- --------------------
Operating expenses          -528   -480   -465   -599    -423   -463   -420



Other operating income, net   13      6     21      8      14      7     10
                         ----------------------------- --------------------
Operating income            -369   -274   -193   -181      20     36     63

Operating margin %        -21.3% -16.3% -11.9% -10.4%    1.4%   2.1%   4.0%



Financial income               9      6      3      4       7      2      7

Financial expenses           -10    -15     -9    -12      -9     -7     -8
                         ----------------------------- --------------------
Income after financial
items                       -370   -283   -199   -190      18     31     62



Taxes                         84     74     42     36       6    -16    -12

Minority interest             -6     -4     -6    -12      -3     -4     -2
                         ----------------------------- --------------------
Net income                  -293   -213   -164   -167      21     12     49





Number of units shipped
(million)                   14.5   13.8   14.1   14.6    10.5   11.0   10.4

ASP (EUR)                    120    122    114    120     134    160    154









EUR million                          2009                      2010
------------------------------------------------------ --------------------
Restructuring charges         Q1     Q2     Q3     Q4      Q1     Q2     Q3
------------------------------------------------------ --------------------
  Cost of sales                7     -9      0     41      -2     33      3

  Research and development
expenses                       2      9      1     72       2      1    -10

  Sales and administrative
expenses                       3      1      1     37       3     -2     11
------------------------------------------------------ --------------------
Total                         12      1      2    150       3     32      4




Sony Ericsson
CONSOLIDATED BALANCE SHEET

                                          Sep 30   Dec 31   Jun 30   Sep 30

EUR million                                 2009     2009     2010     2010
---------------------------------------------------------------------------

ASSETS



Total fixed and financial assets             757      779      836      813



Current assets

Inventories                                  397      358      467      457

Accounts receivable                          917      832    1,063      986

Other assets                                 416      415      412      328

Other short-term cash investments            464      489      477      440

Cash and bank                                532      389      562      482
                                         -------- -------- -------- -------
Total current assets                       2,726    2,483    2,981    2,692




---------------------------------------------------------------------------
Total assets                               3,482    3,262    3,817    3,505
---------------------------------------------------------------------------

SHAREHOLDERS' EQUITY AND LIABILITIES


Shareholders' equity                         532      381      510      480

Minority interest                             43       47       66       62
                                         -------- -------- -------- -------
Total equity                                 575      428      575      541


Borrowing, Non Current                        50        0      101      100

Other long-term liabilities                   31       32       40       30
                                         -------- -------- -------- -------
Total long-term liabilities                   81       32      141      130


Accounts payable                           1,019      852      973      922

Borrowing, Current                           105      258      329      284

Other current liabilities                  1,702    1,692    1,798    1,628
                                         -------- -------- -------- -------
Total current liabilities                  2,826    2,802    3,101    2,834


---------------------------------------------------------------------------
Total shareholders' equity and liabilities 3,482    3,262    3,817    3,505
---------------------------------------------------------------------------


Net cash*                                     841      620      609
538

*  Net cash is  defined as cash  and bank plus  short-term cash investments
less
interest-bearing liabilities.


Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS

                                             Jul-Sep      Jan-Sep
                                           ------------ -----------
EUR million                                 2009  2010    2009 2010
------------------------------------------------------- -----------

OPERATING

Net income                                  -164    49    -669   82

Adjustments to reconcile net income to cash   20   -66      87 -105
                                           ------------ -----------
                                            -143   -17    -583  -23



Changes in operating net assets               49   -38     431  -96
                                           ------------ -----------
Cash flow from operating activities          -94   -54    -152 -119



INVESTING

Investing activities                         -42     2     -74   14
                                           ------------ -----------
Cash flow from investing activities          -42     2     -74   14


FINANCING

Financing activities                         159  - 32     106  118
                                           ------------ -----------
Cash flow from financing activities          159   -32     106  118



Net change in cash                            22   -85    -120   12

Cash, beginning of period                    965 1,039   1,125  878

Translation difference in Cash                 9   -33      -9   31
                                           ------------ -----------
Cash, end of period                          996   921     996  921




Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

                                           2009                  2010
                                  ----------------------- -----------------
EUR million                           Q1    Q2   Q3   Q4     Q1    Q2    Q3
--------------------------------------------------------- -----------------


OPERATING

Net income                          -293  -213 -164 -167     21    12    49

Adjustments to reconcile net income to
cash                                  29    37   20   48    -44     4   -66
                                  ----------------------- -----------------
                                    -263  -176 -143 -119    -23    16   -17



Changes in operating net assets      321    60   49  -97    -72    13   -38
                                  ----------------------- -----------------
Cash flow from operating activities   58  -115  -94 -216    -94    29   -54



INVESTING

Investing activities                 -19   -13  -42  -10     27   -15     2
                                  ----------------------- -----------------
Cash flow from investing activities  -19   -13  -42  -10     27   -15     2



FINANCING

Financing activities                - 53     0  159  100    150     0  - 32
                                  ----------------------- -----------------
Cash flow from financing activities  -53     0  159  100    150     0   -32



Net change in cash                   -14  -128   22 -126     83    15   -85

Cash, beginning of period          1,125 1,116  965  996    878   980 1,039

Translation difference in Cash         5   -23    9    8     19    45   -33
                                  ----------------------- -----------------
Cash, end of period                1,116   965  996  878    980 1,039   921




Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER

EUR million

                                         2009                   2010
                               ------------------------- ------------------
Isolated quarters                  Q1    Q2    Q3    Q4      Q1    Q2    Q3
---------------------------------------------------------------------------
Europe, Middle East & Africa *    977   927   875   966     711   876   837

Americas                          200   195   232   222     201   223   222

Asia                              559   562   512   562     493   659   544
---------------------------------------------------------------------------
Total                           1,736 1,684 1,619 1,750   1,405 1,757 1,603
---------------------------------------------------------------------------
* of which Western Europe         721   678   636   678     525   668   632





                                         2009                   2010
                               ------------------------- ------------------
Sequential change (%)              Q1    Q2    Q3    Q4      Q1    Q2    Q3
---------------------------------------------------------------------------
Europe, Middle East & Africa *   -40%   -5%   -6%   10%    -26%   23%   -4%

Americas                         -69%   -3%   19%   -4%    -10%   11%    0%

Asia                             -12%    1%   -9%   10%    -12%   34%  -18%
---------------------------------------------------------------------------
Total                            -40%   -3%   -4%    8%    -20%   25%   -9%
---------------------------------------------------------------------------
* of which Western Europe        -35%   -6%   -6%    7%    -23%   27%   -5%





                                         2009                   2010
                               ------------------------- ------------------
Year over year change (%)          Q1    Q2    Q3    Q4      Q1    Q2    Q3
---------------------------------------------------------------------------
Europe, Middle East & Africa *   -35%  -33%  -39%  -41%    -27%   -5%   -4%

Americas                         -59%  -74%  -67%  -65%      1%   14%   -4%

Asia                             -23%  -19%  -25%  -12%    -12%   17%    6%
---------------------------------------------------------------------------
Total                            -36%  -40%  -42%  -40%    -19%    4%   -1%
---------------------------------------------------------------------------
* of which Western Europe        -26%  -25%  -33%  -39%    -27%   -2%   -1%





                                         2009                   2010
                               ------------------------- ------------------
Year to date                     0903  0906  0909  0912    1003  1006  1009
---------------------------------------------------------------------------
Europe, Middle East & Africa *    977 1,903 2,778 3,744     711 1,587 2,424

Americas                          200   395   627   850     201   424   646

Asia                              559 1,121 1,633 2,194     493 1,152 1,695
---------------------------------------------------------------------------
Total                           1,736 3,419 5,038 6,788   1,405 3,162 4,765
---------------------------------------------------------------------------
* of which Western Europe         721 1,400 2,036 2,714     525 1,193 1,825





                                         2009                   2010
                               ------------------------- ------------------
YTD year over year change (%)    0903  0906  0909  0912    1003  1006  1009
---------------------------------------------------------------------------
Europe, Middle East & Africa *   -35%  -34%  -35%  -37%    -27%  -17%  -13%

Americas                         -59%  -68%  -67%  -67%      1%    7%    3%

Asia                             -23%  -21%  -22%  -20%    -12%    3%    4%
---------------------------------------------------------------------------
Total                            -36%  -38%  -40%  -40%    -19%   -8%   -5%
---------------------------------------------------------------------------
* of which Western Europe        -26%  -26%  -28%  -31%    -27%  -15%  -10%



The full report (including tables) can be downloaded from the following link:



[HUG#1452148]





Third quarter report 2010: http://hugin.info/1061/R/1452148/393092.pdf




This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ericsson via Thomson Reuters ONE

Contact Information

  • CONTACTS:

    Ericsson investor relations
    Susanne Andersson
    (Stockholm)
    +46 10 719 4631

    Andreas Hedemyr
    (Stockholm)
    +46 10 714 3748

    Sony investor relations
    Gen Tsuchikawa
    (Tokyo)
    +81 3 6748 2111

    Yas Hasegawa
    (London)
    +44 20 7426 8696

    Press / Media
    Sony Ericsson global communications and PR
    Aldo Liguori
    (London)
    +44 20 8762 5860

    Gustaf Brusewitz
    (London)
    +44 7960 58 19 68