Sony Ericsson warns of huge loss as sales fall 40%

Sony Ericsson warned it was expecting to post a €340-390 million ($460-528 million) loss for Q1 2009, largely due to handset sales plummeting by over 40%.

The company said it expects to have shipped just 14 million phones by the end of the quarter, compared to 24.2 million last quarter and 22.3 million a year ago.

The handsets will have an average selling price of €120, a sequential decline of €1. The forecast loss excludes taxes and restructuring charges of around €10-20 million.

Ercisson's stock fell 10.65% after the announcement on Friday. Nokia shares were off 7.65%.

Separately, a Sony Ericsson spokesperson told Reuters the company was expecting the global handset market to shrink by at least 10% in 2009.

Ericsson is rumored to be considering leaving the Sony Ericsson JV, with Sony reportedly interested in buying out Ericsson's stake.

Sony Ericsson will release its Q1 result on April 17.