Sony Ericsson Swings to First-Quarter Profit

The mobile phone maker earned 21 million euros ($29 million) in the first quarter, a swing from a year-earlier loss, as it focused more on new, high-end products.
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Updated from 4:41 a.m. EDT

STOCKHOLM (

TheStreet

) --

Sony Ericsson

, the mobile phone maker, swung to a profit in the first quarter from the launch of new, high-end products.

Earnings in the quarter were 21 million euros ($29 million) compared with a year-earlier loss of 293 million euros.

"We are pleased to see the positive impact of both the launch of new products and the business transformation programme improving the company's results," said Bert Nordberg, Sony Ericsson's president, in a press release Friday.

Sales in the quarter were 1.4 billion euros, down from 1.74 billion euros last year. Gross margin for the

Ericsson

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and

Sony

(SNE) - Get Report

joint venture increased to 30.6% from a previous 8.4%.

Nordberg said new high-end products, such as the group's Xperia X10 and Vivaz which began shipping at the end of the first quarter, had been "well-received" by the market.

"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," Nordberg said.

Sony Ericsson shipped 10.5 million units in the quarter, a 28% decrease from last year, but up from the 14.6 million units shipped in the fourth quarter.

The average selling price rose 12% "due to good sell-through of existing models, new flagship phones starting to ship at the end of the quarter and a positive currency effect," the company said.

Sony Ericsson maintains a forecast of slight growth in units in the global handset market in 2010.

-- Reported by Joseph Woelfel in New York.

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