Sony Ericsson Widens Losses, Gains Market ShareSony Ericsson Widens Losses, Gains Market Share

Mobile phone manufacturer Sony Ericsson posted expanded losses for its second quarter, and warned investors that it wouldn't meet profitability goals for 2003. But the company says the red ink is mostly the result of restructuring, and other financial indicators show the upstart gaining traction.

For the quarter, which ended June 30, the company said Tuesday that it lost 88 million euros, about $98.4 million, down from a loss of 83 million euros in the same quarter last year. But the earnings report wasn't all bad news; net sales were up 18% year over year, reaching 1.125 billion euros, or about $1.26 billion. The number of phones shipped was also up, climbing 34% to 6.7 million units. The company's GSM phone business was particularly robust, with shipments increasing 84% for the quarter.

The reduced earnings are largely due to restructuring costs incurred after Sony Ericsson killed its American CDMA-based cell-phone business and a number of different R&D activities. As such, the company says it no longer expects to reach profitability in 2003, though taken on its own, the second half of the year should finish in the black. Executives now estimate the company has a market share of 6.4%, up from 5.5% in the first quarter.

The London-based company is co-owned by Swedish company Ericsson AB and Japanese electronics giant Sony Corp.