Strong cell phone demand in emerging markets and in Western Europe boosted Nokia's second-quarter sales and profits, sending its shares to their highest level in more than five years.
Nokia said on Thursday its underlying second-quarter earnings per share rose to 0.32 euros, compared with expectations of 0.25 euros in a Reuters poll, when adjusted for the performance of its networks venture with Siemens .
Shares in Nokia were 7% higher at 22.05 euros, levels they last saw in early 2002.
Nokia, the world's largest cell phone-maker, said it expected global sales of mobile phones to grow 10% this year from 978 million phones in 2006, compared with its earlier forecast of at best 10% growth.
Operating profit margins at all three of Nokia's handset units -- mobile phones, multimedia and enterprise solutions -- increased sharply year-on-year and beat analysts' forecasts.
"Nokia was able to raise their handset margins really much more significantly than expected, and that's the dominating factor in these results," said Danske Markets' analyst Ilkka Rauvola.
"That's because of the decline Motorola is experiencing, and Nokia seems to be taking a big chunk of the vacuum being left by Motorola," he said.