Sony Ericsson reported a 54% jump in net income to €220 million ($302.5m), on a 37% increase in sales to €3.11b. Its pre-tax profit rose 55% to €327m, while unit shipments grew 59% to 24.9m phones. Analysts had expected pre-tax profit of €383m on sales of €3.09b and unit shipments of 23.3m phones. Sony Ericsson said its global market increased about 3% during the quarter to more than 9%, helped by expanded sales to the mid and low-end segments. As a result and as Sony Ericsson expected, its average sales price fell 13.8% to €125. However, analysts had forecast ASP's of €132. Gross and operating margins improved y/y but declined sequentially. "We expect the market in 2007 to remain competitive, but with recently announced products such as the flag-ship Walkman and Cyber-shot models we aim to continue to grow faster than the market," said company president Miles Flint.
Sources: Press release, Bloomberg, Dow Jones, Reuters
Commentary: Mobile Players Take On Apple iPhone With Flat-Rate Mobile Music Service • Global Handset Sales Gain 14% Year/Year • Sony Ericsson to Target Lower-end Cell Phone Segment
Stocks/ETFs to watch: Sony Corp. (SNE), LM Ericsson (ERIC). Competitors: Motorola Inc. (MOT), Nokia Corp. (NOK), Apple Inc. (AAPL), Samsung [see iShares MSCI S. Korea (EWY)]. ETFs: Wireless HOLDRS (WMH), iShares MSCI Sweden Index (EWD), BLDRS Asia 50 ADR Index (ADRA)
Earnings call transcripts: Sony F4Q06, LM Ericsson Q1 2007
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