Sony Expects mobile phone Business To Continue Sucking, Slashes Guidance

A big reason Sony (SNE) missed its Q1 earnings today: Sony Ericsson, its mobile phone joint venture, which has been hit hard this year.

In its lengthy earnings document (PDF), Sony says it doesn’t expect the mobile phone business to get much better this year, and slashed its full-year joint venture guidance by 86%.

Specifically, in its fiscal year ending next March, Sony expects “equity in net income of affiliate companies” to come in around ¥10 billion ($92 million) — down from the ¥70 billion ($647 million) it projected in May — “as the operating results for Sony Ericsson are expected to be significantly lower.”

Last week, Sony Ericsson announced that it essentially broke even during Q2 — it earned $9.5 million on $4.47 billion of revenue — due to slowing growth in mid- to high-end phones, particularly in Europe, and “increased competition.” Sony Ericsson has about 8% market share, the company estimates. It’s also in the process of cutting 2,000 jobs in the next year.

See Also:
Exactly Why Does Sony Want More Of The Music Business, Again?
Sony Misses Q1 Earnings, Cuts Guidance: Problems With Phone Unit And The “Business Environment”

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