Nokia pulls off shock smartphone rebound

Top mobile phone maker Nokia’s fourth-quarter sales and profits beat expectations as it regained market share in smartphones, sending its stock price soaring.

Nokia pulls off shock smartphone rebound

The strong results cap an otherwise tough year for Nokia and the mobile industry, which have been hammered as consumers cut spending in the recession. Shares in Nokia leapt by 14.5% on the back of the news.

Nokia’s underlying fourth-quarter earnings per share fell slightly from a year ago to 0.25 euros, but still beat all expectations.

Nokia’s smartphone performance saw a reassuring improvement despite a strong quarter for RIM and Apple

“[It is an] unbelievably strong report in every aspect,” says analyst Per Lindtorp from Erik Penser in Stockholm.

Nokia repeated its forecast for the handset market to grow 10% in 2010 from a year ago. “This quarter gives us good momentum to build for in 2010,” claims Nokia chief financial officer Timo Ihamuotila, but he says there’s still reason for cautiousness. “Regarding (the) economy we are not out of the woods yet… consumer confidence is still fragile.”

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% in the last quarter from 35% 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,” says Geoff Blaber from British consultancy CCS Insight.

Nokia says revenues from smartphones jumped 26% from the previous quarter to 3.9 billion euros. Average smartphone prices dipped to 186 euros from 190 euros in the third quarter as the firm tried to win back customers with simpler, cheaper smartphones.

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