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Sony Ericsson Turns Surprise Profit

Struggling phone maker Sony Ericsson has announced its financial results for the first quarter of 2010—and, to many industry watchers’ surprise, the company managed to turn a $25 million profit. The company attributes the solid quarter to strong smartphone sales and cost-containment measures that saw the company shedding more than 3,000 employees.

“We are pleased to see the positive impact of both the launch of new products and the business transformation program improving the company’s results,” said Sony Ericsson president Bert Nordberg, in a statement. “Increases in both gross and operating margins show that we are on the right track to build the correct cost structure for our business organization and strategy.”

The news comes after nearly two years of losses and declining market share; most analysts expected Sony Ericsson would continue to hemorrhage money during the early part of 2010. And the company is not exactly out of the woods: its figures show that it shipped 28 percent fewer handsets in the first quarter of 2010 compared to the same period a year ago (down to 10.5 million units) and overall unit sales dropped 19 percent. However, since so many of the sales the company did make were high-end smartphones, the average selling price of Sony Ericsson handsets was up by 12 percent.

Nordberg noted that Sony Ericsson’s Android-based Xperia X10 and new Symbian-based Vivaz phone have been well-received by consumers. The company expects those units’ momentum to continue, augmented by the launch of to new Walkman phones earlier this week.