Sauer-Danfoss Inc. reported a lower-than-expected quarterly loss today and said it expects 2009 sales to decline by 40 percent.

The company posted a first-quarter loss of $78.4 million, or $1.62 per share, compared with net income of $27.9 million, or 54 cents per share, a year earlier. Excluding the effects of currency exchange rates, sales dropped 38 percent during the first quarter.

“The first-quarter results reflect the severe downturn in virtually every market and region we serve,” said President and CEO Sven Ruder. “The decline in sales was particularly steep as our customers have been working down their inventory levels.”

The company had prepared for a 30 to 40 percent drop in sales, but said it is bracing for the higher end of those expectations for the rest of the year.

“We are staying focused on conserving cash and sizing our business to the lower sales levels we expect for the remainder of this year and into 2010,” Ruder said.

During the first quarter, Sauer-Danfoss implemented several cost-savings measures, including the suspension of dividends, reduced salaries for senior management and temporary shutdowns at some of its plants.

For more detailed quarterly information, visit the company’s Web site at www.sauer-danfoss.com and click on the investor relations tab. A webcast of this morning’s earnings call is available until May 20.