Sony Ericsson Expects Sharp Drop in Phone Sales

From PC World: Sony Ericsson issued a profit warning on Friday, saying it will sell only about 14 million phones during the first quarter of 2009, down 8.3 million phones from the same period last year.

The company also expects to post a €340 million (US$460 million) to €390 million net loss before taxes, excluding €10 million to €20 million in restructuring charges. It will announce first quarter results on April 17.

For the first quarter of 2008, Sony Ericsson sold 22.3 million phones and made a €133 million net profit.

The drop in sales and increased net loss are the result of weak consumer demand and slowing retail orders for new stock, according to a company statement.

Last year, Sony Ericsson announced plans to cut costs by €300 million annually and lay off 2,000 people.

The news doesn't come as surprise to Gartner research director Carolina Milanesi. "The mobile phone market has picked up a little bit in the first quarter, but not in the markets Sony Ericsson is dependent on," she said.

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