Mobile phone maker Sony Ericsson posted a smaller than expected third-quarter pretax loss today due to cost savings and improving margins, adding it had strengthened its capital position.
Sony Ericsson, owned by Swedish Ericsson and Japan's Sony, reported a quarterly pretax loss of €199 million, an improvement on the €283 million loss in the second quarter.
"The reduced loss was due to better gross margin, as well as reduced operating expenses," Sony Ericsson said in a statement.
The mean forecast in a Reuters poll of 16 analysts had been for a €274 million loss.
Restructuring charges in the third quarter were €2 million against an average forecast of €70 million. The company had a gross margin of 16 per cent against a forecast of 13.9 per cent and 12 per cent in the second quarter of this year.
The global handset market has been slammed by recession across most of the world over the last year, and Sony Ericsson has reported steep losses in past quarters. Its market share was 5 per cent in the third quarter.
The company stuck by its gloomy prognosis for the market this year, saying it expected a contraction of about 10 per cent.
This compared to rival Nokia's upbeat picture of the market given when it published its results yesterday.
Nokia expects industry mobile sales to be down approximately 7 per cent from 2008 against its previous estimate of around 10 per cent.
Sony Ericsson said it signed loan facilities of €455 million to strengthen its balance sheet and improve liquidity.
It said €155 million had been drawn down by the end of September and €100 million were drawn down at the beginning of October.
Reuters