Mobile phone maker Sony Ericsson revealed that it suffered a 71 million dollar loss in the second quarter due to the earthquake that hit Japan.
The company sold only 7.6 million phone units in the second quarter, a 31 percent decrease year-on-year. Supply constraints due to the earthquake cut sales by 1.5 million units.
“The second quarter profitability was affected by the March 11 earthquake in Japan. We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter,” said Bert Nordberg, Sony Ericsson’s chief executive officer, in a statement.
Sony Ericsson, which is owned by Japanese company Sony Corp. and Swedish phone maker Ericsson, posted a pretax loss of $59.5 million, compared with the average forecast for a 4.9 million profit in a poll.
“Volumes were even lower than we thought, and we were below consensus,” said Swedbank Markets analyst Hakan Wranne. “The product portfolio looks pretty good now ahead of the second half, and if they manage to increase volumes by a couple of million units, they should be back to making profits for the rest of the year – not large profits, but a bit above zero where we have thought they would be.”
The forecast of Sony Ericsson was based on an easing supply chain storage and new smartphone models. Sony Ericsson CEO said that despite the company’s weak second quarter, they are seeing better results for the rest of the year.
via: Reuters
