Stockholm: Sony Ericsson, the world number four mobile phone maker, said on Friday it expected to make a pretax loss of €340-390 million ($459 million-$526 million) in the first quarter, hurt by weak demand.
Sony Ericsson said in a statement net sales and net income before taxes continued to be hit by weak consumer demand and de-stocking.
Sony Ericsson, the no. 4 global handset maker after Nokia, Samsung and LG, said it expected to ship approximately 14 million phones during the period with an estimated average selling price of €120.
“Gross margin is expected to decline both year-on-year and sequentially,” the company said.
The pretax profit estimate excludes restructuring charges in the range of €10-20 million.
“These disappointing results come as little surprise given the current weakness of the Sony Ericsson portfolio and the challenging market conditions it faces in the markets where it is strongest,” said Ben Wood, Research Director at CCS Insight.
In the fourth quarter of 2008, the company, a 50-50 joint venture between Sweden’s Ericsson and Japan’s Sony Corp., posted a pretax loss of €261 million and President Dick Komiyama forecast global demand would shrink at least 5% this year.
Komiyama said then that market share was less of a priority than preserving profitability.
Shares in Ericsson fell 6% to 71.30 crowns.