Sony and Ericsson today announced the financial summary for the third quarter, ended September 30, 2003 of Sony Ericsson Mobile Communications AB (Sony Ericsson), the 50:50 joint venture of Sony and Ericsson. The company reported improved operating results and a continued strong increase in sales. This was achieved through positive market acceptance of new imaging phones, supply chain improvements, and increased operating efficiency.
Units shipped in the quarter reached 7.1 million, which is 42% higher year-on-year. Sales for the quarter were Euro 1,305 million, representing a year-on-year increase of 50%. The strategic focus areas of GSM and Japanese standards posted a 73% and 130% year-on-year growth in shipments respectively. This growth is primarily driven by high demand for imaging phones in these markets.
Income before taxes was Euro 39 million and net income was Euro 62 million, which represent year-on-year improvements of Euro 155 million and Euro 155 million respectively.
"We are encouraged by the improvements achieved during the third quarter and particularly with the high demand for our PDC phones in Japan and the continued success of the T610-series in GSM markets. During the quarter we also announced several new products including our first GSM clamshell phones Z600 and Z200, an entry-level phone T230 and a range of new innovative accessories. We have received very positive feedback from customers about these new products," says Katsumi Ihara, President of Sony Ericsson.
Sony Ericsson intends to be profitable for the second half of 2003. The improvement in profit during the third quarter is attributable to the strong performance in our Japanese business and the continued success of certain products in GSM. Volume and sales are expected to continue to grow during the fourth quarter, but due to an increased proportion of lower priced models in the product mix we anticipate it may be difficult to sustain the current level of profitability in the next quarter.
As previously announced, income before taxes and net income in the second quarter 2003 were negatively affected by EURO 58 m. in restructuring costs. In the third quarter additional costs of EURO 3 m. have been recognised as part of the earlier reported restructuring.