Mobile phone maker Sony Ericsson said volumes should rebound in the run-up to Christmas after blaming module shortages for holding back phone shipments and profits in the third quarter.
The firm, owned by Ericsson and Sony Corp., has pinned its hopes for profit expansion on a surging market for smartphones, but is in a harsh fight against Nokia, the biggest player, and Apple, the most profitable.
Sony Ericsson has cut expenses and revamped its portfolio with handsets like the Xperia X10, Vivaz, X10 mini and X10 mini pro, which offer PC-like functions, pulling itself back into the black this year after seven-straight quarters of losses.
Nonetheless, third-quarter sales were hurt by a component shortfall. They were flat year-on-year, but dipped to 1.6 billion euros from 1.76 billion in the previous period and trailed the average estimate of 1.8 billion in a Reuters poll.
“There have been some shortages of LCD screens and printed circuit boards on the market. I wouldn’t say I had seen a demand decrease,” Sony EricssonChief Executive Bert Nordberg said, adding, “I expect higher volumes in Q4, a rebound.”
Market leader Nokia warned in July that component shortages were a problem for the industry, rumbling telecom gear maker Ericsson which said its second-quarter sales we hurt by competition for core parts.
Nokia reports on october 21, 2010 and Ericsson on October 22, 2010. Ericsson shares were down 1.5% after Sony Ericsson reported.
Sony Ericsson shipped 10.4 million handsets in the period, missing all 27 analyst estimates in the Reuters poll. Their figures ranged from 10.5 million to 13.9 million.
The average foretell was for Sony Ericsson to ship 12 million phones during the July-September period compared to 11 million in the second quarter.
Pretax profit for the firm was 62 million euros (87.3 million), versus a loss of 199 million a year ago and well below a mean forecast for a profit of 72 million in a Reuters poll.
“It was clearly weaker than expected 8% below my expectations on EBIT (earnings before interest and taxes) and it is mainly lower volumes that explain it,” said Per Lindtorp, analyst at Eric Penser.
Popularity: 12%