Sony Ericsson's Profit Doubles

STOCKHOLM: Sony Ericsson launched the reporting season for leading mobile phone makers with a doubling of second-quarter earnings to a record high on Thursday and raised its forecast for total industry sales this year.

Analysts said the forecast-beating figures from the fourth-largest global player, owned by Japan's Sony and Sweden's Ericsson, boded well for larger rivals Nokia, Motorola, Samsung Electronics and LG Electronics, but they saw markets getting tougher next year.

Sony Ericsson said it had benefited from good sales of its products, which include a phone branded with Sony's Cyber-shot camera as well as a line of Walkman music-playing handsets.
Pretax profit rose to 211 million euros ($ 268.9 million) from 87 million in the second quarter of 2005 and beat the average forecast of 156 million by 31 analysts.

Company president Miles Flint was upbeat about the market. "We are generally cautious, but I don't see any reason why we should become more so," he said.

According to the group, growth in the handset market had continued to outpace expectations, and it raised its forecast for global handset sales this year to more than 950 million units from a previous outlook of above 900 million.

"I think that we are still very positive. Every time we bring in an attractive handset, it sells well," Flint said.

He estimated that total industry handset sales in the second quarter had been 230 million units.

Sony Ericsson's second-quarter sales were 2.27 billion euros versus a forecast of 2.09 billion. Its handset sales amounted to 15.7 million units, compared with an expected 14.3 million.

Its average selling price per phone slipped to around 145 euros from 150 euros the previous quarter due to the launch of low-priced models. Sony Ericsson has introduced cheaper phones, priced around $60, to strengthen its position with operators that require a full portfolio from their main vendors.