STOCKHOLM: Sony Ericsson Mobile Communications, the mobile phone maker, said Wednesday that profit tripled in the fourth quarter on surging sales of cellphones that also function as digital cameras and music players.
Net income jumped to €447 million, or $577 million, from €144 million a year earlier, said Sony Ericsson, which is based in London. Sales rose 64 percent to €3.78 billion as the company sold 26 million phones in the quarter.
"They have very good products at the moment," said Marko Alaraatikka of Evli Investment Management in Helsinki. Referring to the tripling of earnings, he said, "It was a surprise."
Sony Ericsson seeks to be among the top three phone makers, a goal that the chief executive, Miles Flint, said Wednesday was "credibly in our grasp." The company is ranked No. 4, behind Nokia, Motorola and Samsung Electronics.
Motorola said this month that its fourth-quarter profit and sales missed forecasts because of lower-than-projected handset revenue. Samsung said last week that its profit fell after cutting prices to compete with rivals.
Sony Ericsson, a venture between Sony and Ericsson, surged past LG Electronics last year to take the No. 4 spot. Capitalizing on the Walkman and Cyber-shot camera brands helped the company charge more for its phones, and the average selling price was €146 in the fourth quarter, Sony Ericsson said.
In Stockholm, shares of Ericsson closed at 29.90 kronor, or $4.26, down 2 kronor. In Tokyo, Sony shares closed at ¥5,660, or $46.91, down ¥30.
Sony Ericsson raised its estimate for total global handset sales in 2006 to about 980 million from 950 million. The number will swell to 1.1 billion in 2007, it said during a conference call.
The company estimated that it increased its market share to 9 percent in the fourth quarter, up one percentage point from the preceding period. Estimates by the research firm Gartner showed Sony Ericsson's market share at 7.7 percent in the third quarter while Samsung had 12.2 percent then.
"We're not a small player any longer," Flint, the chief executive, said in an interview. He said becoming No. 3 would probably happen "in the not too distant future." Sony Ericsson will also try to become stronger in North America, a market he described as "challenging."
Fourth-quarter sales were driven by the popularity of the K800i phone, which includes a 3.2 megapixel camera, and phones that have a music player.
In the fourth quarter, the company sold 2.2 million Cyber-shot phones and 6.5 million Walkman phones, Flint said. Four out of five Sony Ericsson models now have a built-in camera, he said.
"Sony Ericsson is doing a great job leveraging their Walkman and Cyber- shot brands and, maybe more important, their vast knowledge of camera and music player user interface design," said Rod Hall of J.P. Morgan. "By some accounts, Sony Ericsson phones have begun outselling Nokia in some European markets and are also taking share from Motorola."
The company also said it was buying UIQ Technology, a division of Symbian, which makes mobile phone software. No price was announced.
ASML profit rises fourfold
ASML, which manufactures chip- making machines, said fourth-quarter profit quadrupled on demand for semiconductors for iPods and cellphones.
Net income jumped to a record €205.5 million from €51.6 million a year earlier, said the company, which is based in the Dutch city of Veldhoven.
Shares of ASML had their greatest rise in more than three years after the company said orders would be "healthy" in the first quarter and revenue this year would gain. The shares closed at €20.39, or $26.33, up €1.58.
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