STOCKHOLM, SWEDEN--(Marketwire - Oct 14, 2011) -

Highlights:

* Income before taxes was Euro 31 million

* 33 percent increase in sales quarter-on-quarter

* Smartphones account for more than 80 percent of total sales

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the third quarter ended September 30, 2011 is as follows:

 Q3 2010 Q2 2011 Q3 2011 Number of units shipped (million) 10.4 7.6 9.5 Average selling price (Euro) 154 156 166 Sales (Euro m.) 1,603 1,193 1,586 Gross margin (%) 30% 31% 27% Operating income (Euro m.) 63 -37 38 Operating margin (%) 4% -3% 2% Restructuring charges (Euro m.) 4 - - Operating income excl. restructuring charges (Euro m.) 67 -37 38 Operating margin excl. restructuring charges (%) 4% -3% 2% Income before taxes (IBT) (Euro m.) 62 -42 31 IBT excl. restructuring charges (Euro m.) 66 -42 31 Net income (Euro m.) 49 -50 0 

Bert Nordberg, President and CEO of Sony Ericsson commented, "We delivered a solid 73 million Euro improvement in income before taxes as we rebounded from the previous quarter with a 33 percent increase in sales. Android-based Xperia™ smartphone sales now account for more than 80 percent of sales and we have shipped 22 million Xperia smartphones to date. We will continue to invest in the smartphone market, shifting the entire portfolio to smartphones during 2012."

Units shipped during the quarter were 9.5 million, a 9% decrease year-on-year due to a decline in feature phone shipments, partially offset by an increase in smartphone shipments. The 25% quarter-on-quarter increase was due to the higher volume of smartphones shipped.

Average selling price (ASP) for the quarter was Euro 166, up 8% year-on-year and 6% sequentially. The year-on-year increase was due to the shift to smartphones and geographic mix despite a negative effect from foreign exchange rates. The sequential increase was due to product and geographic mix.

Sales for the quarter were approximately Euro 1.6 billion and essentially flat year-on-year.

The gross margin percentage for the quarter was 27%, a decrease of 3 percentage points year-on-year and 4 percentage points from the previous quarter. The year-on-year decrease in margin is attributed to product and geographic mix. The sequential decrease in margin was due to inventory-related adjustments and product and geographic mix.

Income before taxes for the quarter was Euro 31 million, compared to income before taxes of Euro 62 million for the same quarter in the previous year. Loss before taxes for the previous quarter was Euro 42 million. The sequential improvement was reflective of higher sales and lower operating expenses, while the year-on-year decline was due to lower gross margin percentage offset by lower operating expenses.

Net income during the quarter improved by Euro 50 million sequentially, while net income decreased by Euro 49 million year-on-year. Income taxes recorded during the quarter reflect the distribution of profits and losses between various jurisdictions and tax adjustments. Minority interest reflects higher net income at a majority-owned joint venture company.

Cash flow from operating activities during the quarter was Euro 53 million. External borrowings of Euro 51 million were repaid during the quarter, resulting in total borrowings of Euro 718 million at the end of the quarter. Total cash balances at September 30, 2011 amounted to Euro 466 million.

Sony Ericsson estimates that its share of the global Android-based smartphone market during the quarter was approximately 12% in volume and 11% in value.

Sony Ericsson maintains its forecast for modest industry growth in total units in the global handset market for 2011.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia™ is a trademark of Sony Ericsson Mobile Communications AB. Sony is a registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not expressly granted herein are reserved and subject to change without prior notice.

EDITOR'S NOTES:

 Financial statements: Consolidated income statement Consolidated income statement - isolated quarters Consolidated balance sheet Consolidated statement of cash flows Consolidated statement of cash flows - isolated quarters Net sales by market area by quarter 

About Sony Ericsson

Sony Ericsson celebrates its 10th year as a joint venture between Sony Corporation and Ericsson in October 2011. Over the years Sony Ericsson has brought together the best communication technologies with superior entertainment user experiences to create its Xperia™ line of the 'most entertaining smartphones' in the mobile handset industry. With its global corporate functions in London, Sony Ericsson has sales and marketing operations in all major regions of the world, as well as manufacturing operations in China, and product development sites in China, Japan, Sweden and Silicon Valley, California. For more information, please visit:[ www.sonyericsson.com/press ].

- ENDS -

This press release contains forward-looking statements that involve inherent risks and uncertainties. Sony Ericsson has identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see Sony's and Ericsson's filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.

Sony Ericsson CONSOLIDATED INCOME STATEMENT

 Jul-Sep Jan-Sep -------------------------------- ------------------------- EUR million 2010 2011 Change 2010 2011 Change ------------------------------------------------- ------------------------- Net sales 1,603 1,586 -1% 4,765 3,924 -18% Cost of sales -1,130 -1,159 3% -3,371 -2,750 -18% ------------------------- ------------------------ Gross profit 473 427 -10% 1,394 1,174 -16% Gross margin % 30% 27% -3 pp 29% 30% 1pp Research and development expenses -179 -190 6% -555 -547 -1% Selling and administrative expenses -241 -207 -14% -750 -630 -16% ------------------------- ------------------------ Operating expenses -420 -397 -5% -1,305 -1,177 -10% Other operating income, net 10 8 -20% 31 24 -23% ------------------------- ------------------------ Operating income 63 38 -40% 120 21 -83% Operating margin % 4% 2% -2pp 3% 1% -2pp Financial income 7 7 0% 16 15 -6% Financial expenses -8 -14 75% -24 -32 33% ------------------------- ------------------------ Income before taxes 62 31 -50% 112 4 -96% Taxes -12 -17 42% -21 -26 24% Minority interest -2 -14 600% -8 -18 125% ------------------------- ------------------------ Net income 49 0 -100% 82 -40 ------------------------------------------ ------------------------ Number of units shipped (million) 10.4 9.5 -9% 31.9 25.3 -21% ASP (EUR) 154 166 8% 150 155 3% ------------------------------------------ ------------------------ EUR million Jul-Sep Jan-Sep ------------------------------------------ ------------------------ Restructuring charges 2010 2011 2010 2011 ------------------------------------------ ------------------------ Cost of sales -3 - -34 - Research and development expenses 5 - 2 - Selling and administrative expenses -6 - -7 - ------------------------------------------ ------------------------ Total -4 - -39 - * Operating expenses in 2010 have been restated to reflect certain organizational changes. 

Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 2010 2011 ---------------------------- ------------------- EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------- ------------------- Net sales 1,405 1,757 1,603 1,528 1,145 1,193 1,586 Cost of sales -975 -1,266 -1,130 -1,069 -763 -828 -1,159 ---------------------------- ------------------- Gross profit 429 492 473 459 382 365 427 Gross margin % 31% 28% 30% 30% 33% 31% 27% Research and development expenses -185 -191 -179 -191 -173 -184 -190 Selling and administrative expenses -238 -272 -241 -236 -199 -224 -207 ---------------------------- ------------------- Operating expenses -423 -463 -420 -427 -372 -408 -397 Other operating income, net 14 7 10 7 10 6 8 ---------------------------- ------------------- Operating income 20 36 63 39 19 -37 38 Operating margin % 1% 2% 4% 3% 2% -3% 2% Financial income 7 2 7 2 3 5 7 Financial expenses -9 -7 -8 -6 -8 -10 -14 ---------------------------- ------------------- Income before taxes 18 31 62 35 15 -42 31 Taxes 6 -16 -12 -27 -5 -3 -17 Minority interest -3 -4 -2 0 1 -5 -14 ---------------------------- ------------------- Net income 21 12 49 8 11 -50 0 ------------------------------------------------------- ------------------- Number of units shipped (million) 10.5 11.0 10.4 11.2 8.1 7.6 9.5 ASP (EUR) 134 160 154 136 141 156 166 ------------------------------------------------------- ------------------- EUR million 2010 2011 ------------------------------------------------------- ------------------- Restructuring charges Q1 Q2 Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------- ------------------- Cost of sales 2 -33 -3 2 - - - Research and development expenses -2 -1 5 0 - - - Selling and administrative expenses -3 2 -6 -5 - - - ------------------------------------------------------- ------------------- Total -3 -32 -4 -3 - - - * Operating expenses in 2010 have been restated to reflect certain organizational changes. 

Sony Ericsson

CONSOLIDATED BALANCE SHEET

 Sep 30 Dec 31 Jun 30 Sep 30 EUR million 2010 2010 2011 2011 ------------------------------------------------------------------------- ASSETS Total fixed and financial assets 813 803 819 890 Current assets Inventories 457 460 570 656 Accounts receivable 986 836 872 1,090 Other assets 328 295 330 408 Other short-term cash investments 440 276 329 301 Cash and bank 482 329 188 165 -------- -------- -------- ------- Total current assets 2,692 2,196 2,289 2,620 ------------------------------------------------------------------------- Total assets 3,505 2,999 3,108 3,510 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 480 532 451 507 Minority interest 62 42 43 60 -------- -------- -------- ------- Total equity 541 574 494 567 Borrowing, Non Current 100 100 0 0 Other long-term liabilities 30 32 31 40 -------- -------- -------- ------- Total long-term liabilities 130 132 31 40 Accounts payable 922 769 716 1,050 Borrowing, Current 284 130 769 718 Other current liabilities 1,628 1,394 1,098 1,135 -------- -------- -------- ------- Total current liabilities 2,834 2,293 2,583 2,903 -------------------------------------------------------------------------- Total shareholders' equity and liabilities 3,505 2,999 3,108 3,510 --------------------------------------------------------------------------- Net cash* 538 375 -252 -252 * Net cash is defined as cash and bank deposit plus short-term cash investments less interest-bearing liabilities. 

Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 Jul-Sep Jan-Sep ------------ ---------- EUR million 2010 2011 2010 2011 ------------------------------------------------------- ---------- OPERATING Net income 49 0 82 -40 Adjustments to reconcile net income to cash -66 27 -105 -139 ------------ ---------- -17 27 -23 -179 Changes in operating net assets -38 26 -96 -345 ------------ ---------- Cash flow from operating activities -54 53 -119 -524 INVESTING Investing activities 2 -58 14 -94 ------------ ---------- Cash flow from investing activities 2 -58 14 -94 FINANCING Financing activities -32 -56 118 485 ------------ ---------- Cash flow from financing activities -32 -56 118 485 Net change in cash -85 -61 12 -133 Cash, beginning of period 1,039 516 878 605 Translation difference in Cash -33 11 31 -6 ------------ ---------- Cash, end of period 921 466 921 466 ------------------------------------------------------- ---------- 

Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 2010 2011 ----------------------- -------------- EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------------ -------------- OPERATING Net income 21 12 49 8 11 -50 0 Adjustments to reconcile net income to cash -44 4 -66 -50 -137 -29 27 ----------------------- -------------- -23 16 -17 -42 -127 -79 27 Changes in operating net assets -72 13 -38 -86 -226 -145 26 ----------------------- -------------- Cash flow from operating activities -94 29 -54 -128 -353 -224 53 INVESTING Investing activities 27 -15 2 -18 -14 -21 -58 ----------------------- -------------- Cash flow from investing activities 27 -15 2 -18 -14 -21 -58 FINANCING Financing activities 150 0 -32 -178 375 165 -56 ----------------------- -------------- Cash flow from financing activities 150 0 -32 -178 375 165 -56 Net change in cash 83 15 -85 -324 8 -80 -61 Cash, beginning of period 878 980 1,039 921 605 599 516 Translation difference in Cash 19 45 -33 7 -14 -3 11 ----------------------- -------------- Cash, end of period 980 1,039 921 605 599 516 466 ------------------------------------------------------------ -------------- 

Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

 EUR million 2010 2011 ------------------------- ------------------ Isolated quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------- ------------------ Europe, Middle East & Africa * 711 876 837 795 485 435 480 Americas 201 223 222 205 151 193 121 Asia 493 659 544 528 509 565 985 -------------------------------------------------------- ------------------ Total 1,405 1,757 1,603 1,528 1,145 1,193 1,586 -------------------------------------------------------- ------------------ * of which Western Europe 525 668 632 569 307 323 313 2010 2011 ------------------------- ------------------ Sequential change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------- ------------------ Europe, Middle East & Africa * -26% 23% -4% -5% -39% -10% 10% Americas -9% 11% 0% -8% -26% 28% -37% Asia -12% 34% -17% -3% -4% 11% 74% -------------------------------------------------------- ------------------ Total -20% 25% -9% -5% -25% 4% 33% -------------------------------------------------------- ------------------ * of which Western Europe -23% 27% -5% -10% -46% 5% -3% 2010 2011 ------------------------- ------------------ Year over year change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------- ------------------ Europe, Middle East & Africa * -27% -6% -4% -18% -32% -50% -43% Americas 1% 14% -4% -8% -25% -13% -45% Asia -12% 17% 6% -6% 3% -14% 81% -------------------------------------------------------- ------------------ Total -19% 4% -1% -13% -19% -32% -1% -------------------------------------------------------- ------------------ * of which Western Europe -27% -1% -1% -16% -42% -52% -50% 2010 2011 ------------------------- ------------------ Year to date 1003 1006 1009 1012 1103 1106 1109 -------------------------------------------------------- ------------------ Europe, Middle East & Africa * 711 1,587 2,424 3,219 485 919 1,399 Americas 201 424 646 851 151 345 466 Asia 493 1,152 1,695 2,224 509 1,075 2,060 -------------------------------------------------------- ------------------ Total 1,405 3,162 4,765 6,294 1,145 2,339 3,925 -------------------------------------------------------- ------------------ * of which Western Europe 525 1,193 1,825 2,393 307 630 943 2010 2011 ------------------------- ------------------ YTD year over year change (%) 1003 1006 1009 1012 1103 1106 1109 -------------------------------------------------------- ------------------ Europe, Middle East & Africa * -27% -17% -13% -14% -32% -42% -42% Americas 1% 7% 3% 0% -25% -19% -28% Asia -12% 3% 4% 1% 3% -7% 22% -------------------------------------------------------- ------------------ Total -19% -8% -5% -7% -19% -26% -18% -------------------------------------------------------- ------------------ * of which Western Europe -27% -15% -10% -12% -42% -47% -48% 

The full report (including tables) can be downloaded from the following link:

Third quarter 2011 financial results: [ http://hugin.info/1061/R/1554854/479397.pdf ]

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(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ericsson via Thomson Reuters ONE

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