Sony Ericsson has reported a surprise profit for the first three months of the year, boosted by new product launches and cost savings.
Net profit came in at 21m euros ($28m; £18m), compared with a loss of 293m euros a year earlier.
The unexpected profit came despite mobile phone sales being 28% lower from a year ago at 10.5 million phones.
Sony Ericsson is playing catch up with other mobile makers that were quicker to launch smartphones.
Falling sales
"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, president of Sony Ericsson.
He picked out the company's new Experia X10 and Vivaz products as being particularly well received.
Despite the launches, sales over the quarter fell to 1.74bn euros compared with 1.41bn euros for the same period a year ago.
Improved margins and cost-cutting also helped to improve profitability.
Sony Ericsson reported a net loss of 836m euros for 2009 as a whole.
The mobile phone market has been hit by the global downturn, as consumers hold off from buying new phones.
Sony Ericsson has also been caught off guard by the switch to smartphones - the one area of the market where sales have been growing.