Sony Ericsson, the joint venture of Japanese consumer electronics company Sony ( SNE) and European telecommunications company Ericsson ( ERIC), said it will report a first-quarter pretax loss as net sales decline because of weak consumer demand and de-stocking in the retail and distribution channels.

The cellphone maker said it expects to report a pretax loss in the first quarter of 340 million euros to 390 million euros ($534 million), excluding restructuring charges of 10 million euros to 20 million euros.

Gross margin in the quarter is expected to decline both year-on-year and sequentially, Sony Ericsson said in a statement Friday. Gross margin in the fourth quarter was 15%.

Sony Ericsson expects to ship 14 million phones in the first quarter at an average price of 120 euros, In the fourth quarter, Sony Ericsson shipped 24.2 million phones, at an average price of 121 euros, according to Bloomberg.

The company will announce its first-quarter results on April 17.