Not good news from Sony (NYSE: SNE) Ericsson (NSDQ: ERIC). The fifth largest handset manufacturer said today that slowing demand for its mid-to-high end mobile phones and its delay in shipping some new products will hit its second quarter sales and earnings. The company said it now expected to break even before taxes.

SEE ALSO: Earnings: SonyEricsson Q1 Collapses On R&D Costs, Lower High-End Sales

It now plans to ship 24 million phones in the second quarter with an estimated average selling price (ASP) of 115 euros ($181). It also said that it expected gross margins to decline, both year over year, and compared to Q1.

Jyske Bank analyst Robert Jacobsen told Bloomberg that the company’s current problems seem to be similar to the ones they had in the first quarter. The handset maker announced in March that slowing handset sales would hurt their Q1 earnings. Jacobsen, said, however, that he expected a “gradual improvement” for Sony Ericsson, and for them to return to profit in the second half. (Release).