The world’s biggest mobile phone maker, Nokia Corp., on Thursday said strong sales of smart phones and lower costs helped profits rise 65 percent in the fourth quarter despite a drop in total revenue.
The better-than-expected report sent Nokia shares surging and suggested that the cell phone industry is recovering from the impact of the global financial crisis.
Nokia’s net profit was euro948 million ($1.3 billion) in the last three months of 2009, up from euro576 million in the last quarter of 2008 although sales fell 5.3 percent to euro12 billion from euro12.7 billion.
CEO Olli-Pekka Kallasvuo predicted that total global mobile phone sales would grow 10 percent in 2010, and that Nokia would retain its market share. Four of 10 cell phones sold worldwide are Nokia products.
“This quarterly result shows that there is a quite a lot of momentum in the mobile phone market at the moment, and that was also apparent in Nokia’s result,” Kallasvuo said.
Nokia shares rose 10 percent to euro9.89 ($13.85) on the Helsinki Stock Exchange.
Nokia said its share of the global handset market grew to 39 percent in the fourth quarter, from 38 percent in the previous quarter and 37 percent in the fourth quarter of 2008.
In smart phones, where competitors include Research in Motion Ltd.’s BlackBerry and Apple’s Inc.’s iPhone, Nokia said its market share rose from 35 percent to 40 percent.
“This was the surprise. Many had expected Nokia’s share of smart phones to fall even lower from earlier figures but in fact it was up,” said Michael Schroeder from FIM Bank. “And across the board Nokia did pretty well.”
The company’s results were also boosted by the fact that special items, one-time costs which include restructuring charges, were significantly lower than in the comparable quarter in 2008.
The mobile phone industry was hit hard by the financial crisis,…