Nokia beats forecasts, shares rally

Top mobile phone maker Nokia's fourth-quarter sales and profits beat expectations as it regained market share in smartphones, sending its stock price 14 per cent higher.

The strong results cap an otherwise tough year for Nokia and the cellphone industry, which have been hammered as consumers cut spending in the recession.

Nokia's underlying fourth-quarter earnings per share fell slightly from a year ago to €0.25, but still beat all expectations in a Reuters poll, which ranged from €0.15 to €0.24.

"Unbelievably strong report in every aspect," said analyst Per Lindtorp from Erik Penser in Stockholm.

Nokia repeated its forecast for the handset market to grow 10 per cent in 2010 from a year ago.

"This quarter gives us good momentum to build for in 2010," said Nokia chief financial officer Timo Ihamuotila, but he said there was still reason for cautiousness.

"Regarding (the) economy we are not out of the woods yet... consumer confidence is still fragile," he said.

The result marked an end to a steady stream of market share losses for Nokia's smartphones, with the firm saying its share rose to 40 pe cent in the last quarter from 35 per cent in the third quarter of 2009 as it launched new models.

Nokia had been hurt in recent quarters by a dated portfolio of smartphones, with Apple's iPhone and Blackberry-maker Research in Motion both eating into its share of this fatter margin business.

"Nokia's smartphone performance saw a reassuring improvement despite a strong quarter for RIM and Apple," said Geoff Blaber from British consultancy CCS Insight.