Re: [Barry] Sony Ericsson Going Way up in Q3 2006 Results

[Barry]

You make cool phones and the market will rewards you. Sony Ericsson shipped 20 million handsets in the quarter. That's good enough for 2nd place overall. In terms of the US market, the vendors’ results underscore that two basic approaches to the market have proven workable in the short-term. LG, which delivers twice as many CDMA as GSM handsets, has prided itself on delivering whatever the U.S. carrier customer desires. Sony Ericsson works only in GSM (40 percent of the U.S. market) and has largely ignored carrier customization to instead rely on its Japanese consumer electronics DNA in music and imaging.

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[Barry]

Ericsson posted a 17-percent increase in year-over-year third-quarter net profits thanks to its wildly successful handset joint venture, Sony Ericsson Mobile Communications L.P.

The mobile networks giant owns half of Sony Ericsson, which shipped nearly 20 million handsets during the quarter, a 43-percent year-over-year increase. Ericsson’s quarterly net profit grew to $839 million from year-ago profits of $723 million.

Quarterly revenues rose 12 percent to $5.6 billion, boosted by Sony Ericsson’s $3.7 billion in sales.

Looking forward, Ericsson’s President and Chief Executive Officer Carl-Henric Svanberg said the company sees further momentum and focus on wireless broadband.

Sales at the company’s mobile division jumped 5 percent to $3.8 billion, while professional services sales spiked 31 percent to $1.1 billion.

The company also pointed out that it spent $395 million on restructuring efforts, mostly related to its integration of Marconi, which Ericsson purchased in 2005. Conversely, the sale of a defense unit brought in $422 million.

Ericsson’s earnings results set the bar high as its competitors get set to announce their own earnings in the coming weeks.

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