Sony Ericsson published its Q1 financial results posting profit of 21 million euros i.e. $ 28.4 million attributing it to cost saving measures and new product launches. During the corresponding quarter last year, the company posted 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," Sony Ericsson President Bert Nordberg said.

The company said that its new handsets Xperia X 10 and Vivaz received good response across the globe.

Handset sales dropped 28% to 10.5 million units while revenues declined 19% on a yearly basis to 1.4 billion euros.

Average selling price (ASP) of handset rose 12% to 134 euro. Gross margin increased 31%.

"Gross margin rose both sequentially and year-on-year, reflecting a more favourable product mix and the benefit of cost of sales improvements in the past year," said the company.