Revenue down 36% on year-ago quarter
Cellphone manufacturer Sony Ericsson has reported a net loss of E293m ($383m) for the first quarter 2009, against net income of E133m ($174m) in the year-ago quarter, on revenue down 36% at E1.73bn ($2.26bn). The decline was attributed to continued weak consumer confidence and de-stocking in the retail and distribution channels.
It made an operating loss of E369m ($482.35m) compared to operating income of E184m ($240.5m) in the same period last year. Shipments declined 35% to 14.5 million units and cash flow generated by operating activities was E58m ($76m).
The company’s market share in the quarter decreased 2% sequentially and is now estimated to be about 6%.
In January the company announced a cost-reduction program targeting annual operating expense reductions of E180m ($235.29m) by the end of 2009. The company has now announced an additional cost-saving program that includes a workforce reduction of approximately 2,000 people. It estimates new restructuring charges of E200m ($261.43m).
Sony Ericsson president, Dick Komiyama, said: As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand. We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible. The management intends to pursue an additional cost saving program targeting a further annual operating expense reduction of E400m ($523m) by mid-2010.