Sony Ericsson issues profits warning for Q2

Sony Ericsson warned that it will just break even in the second quarter as worsening market conditions cut into sales, an Associated Press report said.

Shares of the Stockholm-based company tumbled nearly 10% to 60 kronor (€6.3, US$10.02).

Ericsson cited 'moderating demand' for mid-to-high end mobile phones, as well as delays in the quarter in the shipping of new products, the Associated Press report said.

The company said it would break even before taxes.

It was Sony Ericsson's second profit warning this year. In March it warned of similar problems, which led the company reporting a 48% drop in first-quarter net profits.

Sony Ericsson reports second-quarter results on July 18.

The news comes on the heels of disappointing results from Treo smart phone maker Palm, which Thursday reported a fiscal fourth-quarter loss and lower revenue which missed Wall Street expectations. The company said sales of cheaper Centro phones are strong, but higher-margin Treo sales have slowed.

Blackberry maker Research In Motion also this week reported quarterly profit which missed analysts expectations.

When the company released first-quarter results, it said it expected the global handset market for this year to grow at a pace of about 10%, from more than 1.1 billion units in 2007.