American shares of European telecommunications companies are sinking after Sony Ericsson predicted weaker sales of handsets in the first quarter.
Shares of several telecommunications and equipment makers fell to annual lows on the forecast. Sony Ericsson, a joint venture between LM Ericsson Telephone Co. of Finland and Sony Corp. of Japan, said it expects weaker growth in sales of mid- and high-range handsets, and shortages in some components of mid-priced phones.
Sony Ericsson expects to ship fewer phones than it did in the first quarter of 2007, and it forecast a smaller profit.
Ericsson shares dropped $1.93, or 10 percent, to $17.46 in afternoon trading. The company's ADRs, or American Depositary Receipts, fell to $17.04, their lowest price since late 2003.
ADRs are securities that allow U.S. investors to trade shares of companies based overseas.
Cowen and Company analyst Matthew Hoffman lowered his estimates on Ericsson.
"Mature markets, including the U.S. and much of Western Europe, are struggling for growth in the first quarter, but emerging markets appear to be picking up much of the slack," he said.
Elsewhere in the sector, shares of Finland's Nokia Corp. lost $3.43, or 10.5 percent, to $29.31.
Telecom Italia SpA sagged $1.57, or 7.5 percent, to $19.28, and reached an all-time low of $19.22.
Shares of Deutsche Telekom AG lost $1.60, or 8.9 percent, to $16.40. Earlier in the session, the stock set a 52-week low of $16.28.
ADRs of Portugal Telecom SGPS SA fell 64 cents, or 5.6 percent, to $10.86, surpassing their two-year low of $10.84 during the day.
London-based BT Group PLC shed $2.31, or 5.4 percent, to $40.87, and set an annual low of $40.61.
The Bank of New York Europe ADR index, which tracks more than 100 ADRs, fell 6.39 points, or 3.8 percent, to 160.16 in afternoon trading.
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