Nokia Oyj, the world's largest mobile-phone maker, said fourth-quarter revenue and profit beat its forecasts as sales of wireless networks and handsets picked up last month.
Sales were 8.8 billion euros (US$11 billion), little changed from a year earlier, the Espoo, Finland-based company said in a Helsinki exchange statement. Nokia had predicted revenue would drop. Earnings per share, excluding one-time gains and costs as well as goodwill amortization, probably were US$0.28 to US$0.29, up from a forecast of US$0.21 to US$0.23, Nokia said.
Phone companies such as TeliaSonera AB are boosting network orders after slashing spending in the past two years, benefiting Nokia and competitors such as Motorola Inc. Nokia, which controls more than a third of the global handset market, was also aided by booming phone demand and higher prices in last year's final months, helping improve margins.
"December has been a blowout month for both handsets and networks," said Marko Alaraatikka, who helps manage US$3 billion at Evli Investment Management in Helsinki and holds Nokia stock. "Nokia is selling more high-end handsets now."
Nokia raised handset prices in the quarter from the prior three months with "high volumes and an excellent product mix," chief executive Jorma Ollila said in the unscheduled release.
Operating profit at the handset unit reached 24 percent to 25 percent of sales, up from 22.4 percent in the third quarter.
By comparison, Motorola's third-quarter operating margin for its handset business was 5.6 percent, spokesman Bill Parke said.
Handset revenue rose 4 percent to 7 billion euros, after Nokia earlier said it would be "flat to slightly up." Network sales fell 18 percent to 1.7 billion euros from 2.08 billion euros, beating a previous target of 1.4 billion euros.
The Finnish company reports full earnings on Jan. 22.
Nokia last year introduced a record 35 phones to revive sales as European and US markets neared saturation and average phone prices dropped. It's expanding into phones such as the N-Gage, which doubles as a gaming console. The N-Gage retails for about US$500 and the 6600 phone, with a camera and color screen, costs about US$750.
Including all costs, earnings per share was US$0.24 to US$0.25 in the fourth quarter, Nokia said.
Mobile-phone prices have dropped in past years as emerging markets including India and China accounted for a growing part of sales, leaving Nokia unable to lift revenue even as it boosted volumes.
In the third quarter, handset prices dropped 19 percent from a year earlier, Ollila said on Oct. 16.
Consumer appetite for phones equipped with functions such as organizers and cameras surprised some mobile-phone makers in past months. Motorola Inc, the runner-up to Nokia, and rivals like Sony Ericsson Mobile Communications Ltd. have said they were hampered by component shortages.
Shortages probably played into Nokia's hands because of its market clout, said Alaraatikka of Evli. Unlike Motorola, Nokia has said it hasn't been affected by lack of handset parts.
"Because of Nokia's superior size, component suppliers always give them what they want," he said.
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