Nokia's mobile phone business achieved underlying profitability in the fourth quarter of last year, ahead of its earlier forecast, boosted by strong sales of its new Lumia smartphone.
Thursday's trading update was a rare spot of good news for the Finnish handset maker that has been losing market share to Samsung and Apple Inc.
The company said that its results were also helped by €50-million in patent fees, improved cost management and a better than expected performance from its Nokia Siemens Networks unit.
It estimated fourth-quarter operating margin in its mobile phone business was between break-even to 2 per cent. It previously forecast the margin to be around minus 6 per cent.
However, the company said that the competitive environment remains tough and forecast the margin to be minus 2 per cent in the first quarter of this year.
Fourth-quarter net sales in devices and services were about €3.9-billion. It sold a total of 86.3 million devices. Smartphones accounted for 6.6 million units, of which 4.4 million were the Windows-based Lumia handsets.
Nokia's NYSE-listed shares surged 16 per cent to $4.34 at the open.