Mobile phone maker Sony Ericsson posted a much-bigger-than-expected fourth-quarter loss on Friday and announced plans for additional cost savings as it braced for market conditions to worsen. Pretax losses totalled 261 million euros ($346 million) versus a mean forecast in a Reuters poll of analysts for a 72 million loss and a year-earlier 501 million profit.
Operating losses before restructuring charges totalled 133 million versus a forecast 33 million loss and a year-earlier 489 million profit. "We foresee a continued deterioration in the market place in 2009, particularly in the first half," Sony Ericsson President Dick Komiyama said in a statement.
Sony Ericsson, owned by Ericsson and Sony Corp, said its ongoing programme for cost savings of 300 million euros annually was on track, and it had initiated more measures, aiming to save another 180 million euros annually with full effect at the end of 2009.
It said it expected the cost for the additional measures to be covered by a previously announced 300 million euro charge. Sony Ericsson estimated the global handset market grew about 6 percent in 2008 to around 1.19 billion units. The firm's previous outlook had been for growth of about 10 percent.
The firm's average selling price in the fourth quarter was 121 euros, compared with a forecast 110 euros and a year-earlier 123 euros. "Sony Ericsson forecasts that the global handset market will contract in 2009 and that the industry ASP will continue to decline." The world number three handset maker, behind Nokia and Samsung Electronics, was forced to issue two profit warnings last year as consumers scaled back on phone purchases.