Ericsson to feel the heat as Sony Ericsson reports net loss of $317 million

Telecom Lead Team:
$316.57 million net loss reported by Sony Ericsson is likely to
negatively impact the financial performance of Ericsson in 2011, a leading
telecom infrastructure and solutions company.


Ericsson, the joint venture in which Ericsson has 50 percent of the shares and
is accounted for according to the equity method, today reports its Q4 and full
year 2011 results. Sony Ericsson’s loss in the fourth quarter 2011 will impact
Ericsson’s operating income with SEK -1.1 billion in the quarter,” according to
a press release from Ericsson.


will present its fourth quarter and full year 2011 report on January 25, 2011.


Ericsson has reported sales income of 5.21 billion euros in 2011 against 6.29
billion euros in 2010.


On October
27, 2011, Ericsson and consumer electronics major Sony announced
 that Sony will acquire Ericsson’s 50
percent stake in Sony Ericsson Mobile Communications for EUR 1.05 billion in
cash. Following the acquisition, Sony Ericsson will become a wholly-owned
subsidiary of Sony. It will give Sony an opportunity to integrate smartphones
into its network-connected consumer electronics devices including tablets,
televisions and personal computers. The transaction is expected to take place
late January to February 2012.


Ericsson Q3 2011 financial performance

posted 17 percent increase in group sales at SEK 55.5 billion in Q3 2011 as
compared with SEK 47.5 billion in Q3 2011.


Sales in
Latin America, Northern Europe and Central Asia, the Middle East, Sub Saharan
Africa, China and North East Asia grew in double digits. North America,
Ericsson’s largest contributor, reported -6 percent growth to SEK 12.1 billion
in Q3 2011 from SEK 12.9 billion in Q3 2010.


India sales
increased 7 percent year-over-year and decreased -19 percent sequentially.
India sales grew to SEK 2.3 billion in Q3 2011 from SEK 2.1 billion in Q3 2010.


sales in India decreased sequentially due to slower 3G investments. The initial
3G rollouts reached a temporary peak already in the second quarter 2011
following three quarters of intense deployments.


China and
North East Asia sales increased 39 percent year-over-year across all
segments and with especially strong demand in services and multimedia. Operator
investments in the region are mainly driven by the broad introduction of
smartphones which has lead to continuous growth in mobile broadband
subscriptions and usage. 


Baburajan K
[email protected]