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Sony Ericsson Reports Surprise Loss

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Sony Ericsson has reported a surprising loss for the second quarter of 2011, with the blame being firmly placed on the disruption caused by the Japanese earthquake.

The company’s CEO and President Bert Nordberg reported a net loss of €50 million compared to a net gain of €12 million during the same period last year. A drop in smartphone sales of 31 percent in the quarter to 7.6 million units would explain the drop in income. The tragic Japanese earthquake which struck on 11 March, affected a range of manufacturers and as a result disrupted the supply chains of several companies.

"Sony Ericsson's second quarter profitability was affected by the March 11 earthquake in Japan. We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter,” Nordberg commented.

Sony Ericsson Xperia Neo

The one bright point for Sony Ericsson was the growth in its Xperia smartphone range which saw a jump in volume of 150 percent over the same period last year. To date 16 million Xperia handsets have been shipped and this year alone Sony Ericsson has launched eight new models in the range, including most recently the  Arc, Play and Neo.

Revenue for the quarter was €1.1 billion, a 32 percent decrease year-on-year and the company is not expecting massive growth for the rest of the year, saying it “maintains its forecast for modest industry growth in total units in the global handset market for 2011.”

Source: Reuters

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