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Nokia beat some analysts' expectations on Thursday, posting earnings of EUR0.17 per share for the second quarter, ahead of forecasts of EUR0.16 a share.
The company's shares rose 9 percent on the Stockholm stock exchange immediately following the announcement.
However, Nokia said that it expected slightly lower earnings per share for the third quarter of this year, between EUR0.14 and EUR0.16. The company expects this to improve in the fourth quarter but refused to give a specific forecast, saying that visibility was still poor.
The company said it expected the global mobile phone market in 2001 would show "very little or modest" volume growth compared with 2000, when 405 million handsets were sold.
Nokia's sales in the second quarter increased by 5 percent to EUR7.35 billion and Nokia Mobile Phones increased its sales by 10 percent to EUR5.3 billion. Sales at Nokia Networks declined by 2 percent to EUR1.9 billion and profits were down in both the mobile phone and the network divisions.
Technology analyst with Davy Stockbrokers, Paul Phelan, said the results were a bit better than expected.
"Investors will take some solace from the results but Nokia have always been regarded as an exception in the technology industry," said Phelan. He said the longterm outlook for the company was more positive.
Pre-tax operating profit at the company dropped by 21 percent year on year to EUR1.1 billion as profits at its networks and mobile phone divisions dropped by 16 percent and 21 percent respectively.
"Backed by our ability to manage working capital and control costs, we were able to retain our leading market position while sustaining good profitability and positive cash flow," said Nokia chairman and chief executive, Jorma Ollila.
Nokia's pre tax profits for the first half of 2001 dropped to EUR2.65 billion down from EUR2.8 billion in the first half of 2000.
"With market growth expected to pick up again next year, we are in a unique position to build on our strengths," said Ollila.
He said all parts of the organisation were committed to improving efficiency and flexibility.
"We believe firmly in the long-term opportunities of the mobile communications industry," said Ollila.
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