Of all the different handset makers out there, Sony Ericsson seems to be one the most interesting ones to follow when it comes to the companies financial side. The company which has previously seen huge losses was able to post a €21 million net income during the prior quarter, mainly thanks to tax benefits. With no tax benifits to aid the companies bottom line, the joint venture between Japan’s Sony Electronic and Sweeden’s Ericsson was able to bring in €
11 million ($15.7 million) for their first 2011 quarter which ended on March 31st. The companies operating income was €19 million which faired much better then a forecasted operating loss of €15 million.

With the number of handsets shipped dropping to 8.1 million from 10.5 million of prior quarter, sales fell 19% year-on-year to €1.15 billion. Still, Sony Ericsson was able to pull out a 33% gross margin profit on each unit, versus the 31% from the year prior. With Sony Ericsson fully embracing the Android platform and releasing muliple smartphones, the average selling price of handsets sold rose to €141, up 5% year-on-year.

 “On profitability, the results are better than we expected, but that’s because they sold fewer of the more basic feature phones. That explains the volume drop and the ASP increase,” said Hakan Wranne, an analyst at Swedbank. 

Still, the company has a long way to balance out this transition period as they move towards selling more and more smartphones which hold higher prices, versus the traditional “dumb phone” business that many handset makers were in, prior to the iPhone launch. In this quarter alone, 60% of all phones sold by Sony Ericsson were smartphones. While this trend is expected to continue, Sony Ericsson hopes to release some lower priced phone in the near future to help fill in the gap as the sales of traditional phones continued to decline.

 “Sony Ericsson is going through the same phase that Motorola Inc. went through when they migrated their portfolio to smartphones and saw their volume shrink considerably,” said Carolina Milanesi, research director in the mobile device and consumer-services practice of Gartner. 

Of course with the recent tragedies in Japan, Sony has seen its fair share of set backs and select handsets have been delayed.

 “The Japanese earthquake made it a challenging quarter operationally and we are experiencing some disruptions to our supply chain,” Chief Executive Bert Nordberg said in a statement. 

[Via MarketWatch]