January 19, 2006

Sony Ericsson Mobile Communications announced a dramatic increase in its net income during the fourth quarter.

Sony Ericsson also said a boost in its shipment numbers attributed to the success of its Walkman-branded music phones.

"This was another solid quarter for Sony Ericsson, and has enabled us to finish the year with great momentum," said Miles Flint, the company's president.

"We are now seeing the benefit of our earlier investments in R&D, which have enabled us to expand the product line-up and successfully appeal to new consumers with products like the Walkman phone series.

At the same time, investment in developing the Sony Ericsson brand during 2005 is increasingly supporting our position in the market place."

Sony Ericsson posted sales of $2.8 billion, a year-on-year increase of 15 percent.

The company's net income rose from $66.4 million in the fourth quarter of 2004 to $173.9 million in the fourth quarter of last year. The company shipped 16.1 million phones, up 28 percent from the year-ago quarter.

Interestingly, Sony Ericsson said it paid $16.9 million for a 64.5-percent stake in Beijing Suohong Electronics Co. Ltd.

Sony Ericsson said the move would strengthen its in-house manufacturing processes.

CIBC World Markets noted Sony Ericsson's solid results. However, the investment banking firm said the company's earnings won't change its long-term outlook.

"Our thesis on Sony Ericsson has not changed; we expect it will maintain its share flat in 2006," wrote Ittai Kidron with CIBC. The firm makes a market in the securities of L.M. Ericsson, parent to Sony Ericsson.

Source: RCR