- The Washington Times - Friday, March 20, 2009

STOCKHOLM (AP) - Mobile phone maker Sony Ericsson on Friday warned it expects to post a first-quarter pretax loss as it continues to be hurt by falling consumer demand amid the global financial crisis.

In a brief statement, the Sony Corp. and LM Ericsson AB joint venture also said it is taking a hit from distributors and retailers reducing their inventories. It predicted a first-quarter loss of between euro340 million and euro390 million ($465 million to $533 million).

Ericsson shares fell nearly 9 percent to 69.20 kronor ($8.64) in Stockholm after the announcement.

Sales are forecast to be weak in the three-month period, it said, and the gross margin _ a measure of profitability _ is expected to fall both year-on-year and compared with the fourth quarter.

The company plans to ship around 14 million handsets in the period, at an average selling price of about euro120 each, it said.

In the fourth quarter, the group recorded a loss of euro187 million loss from a previous profit of euro373 million, mainly because of declining sales.

Sony Ericsson is due to release its first-quarter results on April 17.

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