Mobile phone manufacturer Sony Ericsson has reported a second quarter running of net profits after a bad patch last year, saying it had raised prices by targeting the top end of the market.
The Japanese-Swedish group, the fifth-biggest player in the global sector, said that in the three months to the end of June, it had made a net profit of €12 million in contrast to a loss of €213 million for the same period last year.
Sales rose by four per cent to €1.76 billion, the company said.
But the outcome fell short of the figures expected by analysts who had forecast a net figure of €50 billion and sales of €1.79 billion, on the basis of a poll by Dow Jones Newswires.
In early trading the price of shares in Sony Ericsson was showing a gain of 1.1 per cent to 87.20 kronor. The overall market showed a rise of 0.3 per cent.
Sales and the net outcome had plunged in 2009. Last year the company launched a programme to reduce costs involving an extra loss of jobs amounting to nearly 2,000 cuts.
The group decided to focus on the high end of the market for handsets.
Chief executive officer Bert Nordberg said: "We are now well positioned for long-term growth."
Since the middle of 2008, the company has reduced its workforce by about 4,000 people to a total of about 7,800 at the end of June. The group said that its programme was now in the final phase and would generate economies of nearly €880 million per year.
The outcome of the programme and strategy showed in the results. The number of handsets sold fell from 13.8 million to 11.0 million in a year, but the average price per unit rose to €160 from €122.
Mr Nordberg said that the results showed that the business was continuing on the upward path noted in the first quarter because it had concentrated on the top end of the market and owing to the success of new so-called smartphones.
The group is owned equally on a 50-50 basis by Ericsson of Sweden and Sony of Japan.
The company estimated that its share of the global market was steady at four per cent in terms of volume in the second quarter, and it held to its forecast that the total number of mobile telephone handsets sold in the world this year would rise slightly from the figure last year.
Ericsson, in common with its long-term rival Nokia, faces head-on new competition from US group Apple with its iPhone and the Canadian company RiM which makes the Blackberry. This has pushed Sony Ericsson to review its strategy to win back market share at the top end of the market.