Thai floods fingered for Sony Ericsson quarterly losses

By Posted 20 Jan 2012, 00:10

With the revelation of the final quarterly earnings of Sony Ericson came some bad news as it appears the company has recorded a slump in sales following a poor Christmas period. Thailand floods are being fingered for the main blame, although recession in other countries may also have played its part.

The fourth quarter in 2011 showed a 19% decrease from the previous quarter which is why the Thailand floods of October and November are being pointed at as the main cause. They were the worst floods they’d experienced in decades which led to the company’s chain suppliers being hit and component shortages.

Last year the joint efforts of Sony and Ericsson led to a £6.7 million profit, or €8 million, as opposed to the £172.3 million, or €207 million, loss this year. According to the article at Huffington Post, tough competition from market rival companies, particularly Samsung and Apple were also blamed for the losses due their cost restructuring and squeezed margins.

Chief Executive and President of Sony Ericsson, Bert Nordberg had this to say on the matter; ‘Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter.’ Amidst all the bad news that the earnings revealed, some encouraging news emerged as it appears the Android smartphone, the Xperia from 2008, managed to shift 65% more units that the year before.

Sony and Ericsson are set to go their separate ways soon when Ericsson relinquishes its part of the company, resulting in the acquisition of £915.6 million, €1.1 billion for their troubles. February looks to be the month the deal is sealed although some reports say the deal may be completed as soon as later this month. Are you surprised by the earnings that were revealed?

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