Sony Ericsson Slowdown Takes A Bite Out of Ericsson (ERIC)

Shares of telecom service provider Ericsson (NASDAQ: ERIC) are having a rough day today after Sony Ericsson, the 50/50 joint venture between Ericsson and Sony, announced that the company sees moderating growth of mobile phone units with related effects on sales and profit in the first quarter 2008.

Sony Ericsson now plans to ship approximately 22 million phones during the first quarter of 2008 with an estimated ASP of EUR 120. This is expected to generate net sales lower than the first quarter of 2007, and NIBT is estimated to be in the range of EUR 150 - 200 million due to increased R&D expenses as a percentage of sales. The increased investments in R&D are in line with the company's strategy to meet future growth ambitions. In addition, Sony Ericsson currently expects gross margin to remain relatively stable for the first quarter of 2008 compared with the first quarter of 2007.

Sony Ericsson plans to announce first quarter 2008 results on April 23rd.

Shares of Ericsson are down over 9% in mid-day trading Wednesday. [LJ]

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