Smartphone maker Sony Ericsson this morning posted a pre-tax loss of 247 million euros ($318 million) in the fourth quarter of 2011, after reporting a profit of 31 million euros in Q3 2011. The company, a 50:50 joint-venture between Sony and Ericsson, blames “intense competition”, “price erosion” and effects from the flooding in Thailand as some of the main drivers for the drop.
Sales for the quarter were approximately 1.3 billion euros, down 16 percent year-on-year.
The fourth quarter of last year ended in a net loss of 207 million euros ($266.5 million), compared to a net income of 8 million euros ($10.3 million) in the same quarter of the previous year.
Analysts were actually expecting a modest profit from the company, so this is quite a shock.
Sony Ericsson’s huge loss in Q4 2011 will impact Ericsson’s operating income with SEK -1.1 b. (125 million euros) in the quarter, the latter company said this morning.
Update with more information from Sony Ericsson’s earnings report:
Its gross margin for the quarter was 24 percent, a decrease of 6 points year-on-year and 3 percentage points from the previous quarter.
The company shipped 9 million units during Q4 2011, a 20 percent decrease year-on-year and a 5 percent decrease compared to Q3. Sony Ericsson has shipped 28 million Xperia (Android) smartphones to date.
Even though Sony Ericsson intends to go all-smartphone during 2012, feature phones still make up some 20 percent of its sales volumes.