Sony Ericsson warns on profit as demand suffers
Güncelleme Tarihi:
Mobile phone maker Sony Ericsson issued a profit warning on Friday, saying gross margins would be hit and the firm expected to about break even in the second quarter.
Sony Ericsson, which is owned by Ericsson and Sony Corp, said in a statement profits had been affected by moderating demand for mid- to high-end phones and product delays, and the market environment was "challenging".
The news sent shares in co-parent Ericsson down 11 percent, although they later recovered to stand down 8.6 percent at 1120 GMT.
Analysts were prepared for softer market conditions after a weak first quarter for the firm and continued signs that consumers are being hit by global market turmoil. But Friday's announcement exacerbated the gloom in the sector "It looks like the quarter will be softer than we expected," said Gartner analyst Carolina Milanesi.
Sony Ericsson said it plans to ship about 24 million phones during the quarter at an estimated average selling price of 115 euros.
"Gross margin is expected to decline both year over year and sequentially. Net income before taxes is estimated to be about break-even," the firm said.
Sony Ericsson results are due on July 18.
An analyst who asked not to be named said: "They are talking about challenging market and they are talking about being late with some products as well. It looks like a combination of features."
The analyst added, "I wasn't expecting good results, but this is clearly significantly worse than what I had expected."