The company also saw its operating income slump to €33 million from €393 million in the July-September period last year.
“As expected the third quarter has continued to be challenging for Sony Ericsson,” company chief executive Dick Komiyama said in the earnings statement.
Sony Ericsson booked sales of €2.8 billion in the third quarter, a 10 percent drop from the €3.1 billion it posted a year earlier.
The company also saw the number of phones sold during the quarter slip to 25.7 million from 25.9 million a year earlier, but the figure was a slight improvement over the second quarter, when 24.4 million devices flew off the shelves.
In July, Sony Ericsson announced that it would lay off 2,000 of its 12,000 employees worldwide before the end of the year, as it scrambled to cut costs amid difficult market conditions.
“Our target remains to reduce operating expenses by €300 million annually by the end of the second quarter 2009, with the full effects expected to appear in the second half of 2009. These plans are progressing in line with expectations,” Komiyama said.
Sony Ericsson, which is not quoted on the stock market, was formed in 2001 through the merger of Ericsson of Sweden, world leader in mobile phone networks, and Japanese electronics giant Sony.
Following the announcement, Ericsson saw its stock price soar 8.3 percent in the first minutes of trading in a market up on average nearly four percent.