Sony Ericsson, the Swedish-Japanese mobile phone producer, gave fresh evidence of its improved health on Thursday reporting a sharp increase in sales and profits and saying it was preparing for "a good Christmas."

The world fifth largest producer of handsets, made a pre-tax profit of €136m in the three months to September 30 on sales of €1.678bn, up 29 per cent on the same period a year earlier. Units shipped increased by 51 per cent to 10.7m.