Sony Ericsson Makes Surprise Quarterly Loss, Hit By Japan

Sony Ericsson Makes Surprise Quarterly Loss, Hit By Japan

Mobile phone maker Sony Ericsson posted a surprise second-quarter loss on Friday as the March 11 earthquake and tsunami in Japan weighed more on its earnings than the market had expected.

"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," Chief Executive Bert Nordberg said in a statement.

Sony Ericsson, owned 50-50 by Ericsson and Sony Corp, posted a pretax loss of 42 million euros ($59.5 million), compared with analysts' average forecast for a 4.9 million profit in a Reuters poll.

The venture sold just 7.6 million phones in the quarter, missing all forecasts which ranged from 8 million to 11 million.

Sony Ericsson -- formed in 2001 -- thrived after its breakthrough with Walkman music phones and Cybershot cameraphones, but it subsequently lost out to leaner rivals at the cheaper end and its share of total handset sales dropped below 3 percent from more than 9 percent at its height.

Sony Ericsson has slashed costs -- including cutting around 4,000 jobs -- and refocused on higher-margin smartphones that link to social networking sites like Facebook. The share of smartphones in its sales rose to more than 70 percent from only 40 percent at the end of 2010.

Samsung Electronics and HTC are predicted by analysts to be the big winners in the global cellphone market in the second quarter, benefiting from demand for their smartphones running Google's software.

(Editing by David Holmes)

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