Updated from 9:17 a.m. EDT

In baseball, Ed Zander sticks with the winners. His investors are doing the same.

Motorola ( MOT) shares rose 2.7% to $20.72 Wednesday after the wireless giant posted strong third-quarter earnings on hard-won gains in the cell-phone market.

CEO Zander, who copped to changing allegiances to Chicago from Boston in the World Series, said on a conference call that the company gained a percentage point of handset market share in the latest quarter, to 19%.

For the quarter ended Oct. 1, the Schaumburg, Ill., wireless giant made $1.75 billion, or 69 cents a share, from continuing operations. That figure includes a net benefit of 39 cents a share from investment gains, tax benefits and reorganization and debt-retirement costs. A year ago, Motorola made $426 million, or 18 cents a share. Revenue surged 26% from a year ago to $9.42 billion.

The numbers stormed past Wall Street's expectations. Analysts surveyed by Thomson First Call had forecast third-quarter earnings of 28 cents a share on revenue of $9.1 billion.

Mobile device sales rose 41% from a year ago to $5.6 billion, as the company sold 38.7 million handsets during the quarter. Motorola said that number is 66% above the year-ago comparison and sets a company record. The company said its market share rose in the latest quarter, and its average selling price held steady at around $140.

Motorola's fortunes have clearly been lifted by the thin metal Razr phone, with 6.5 million units shipped in the third quarter and 12 million to date. Motorola will introduce a code-division multiple-access Razr, presumably for Verizon Wireless and Sprint, this quarter. The CDMA Razr is available in Korea, where it is now the most popular phone, says Zander.

On new phone introductions, Zander said the nonfolding Razr, dubbed Slvr, is available -- as is the rounded fashion phone called Pebl. Analysts expect the new phones to build on design momentum created by Razr.

Cheap phones were as much the star as the higher-priced Razr for Motorola. The company calls phones below $50 low-end, and those phones are targeted to Eastern Europe, India and Latin America. Executives said growth in the low end was balanced by growth in more expensive phones. The company says it plans to design phones for all price categories.

"It looks like they did pretty well. The margins were good ... handset shipments were pretty much in line with expectations, though below some of the whisper number estimates," said one hedge fund manager with no positions.

The news comes as the global handset market continues to grow even faster than investors had hoped for. Motorola and rival Nokia ( NOK) have both reaped sizable gains from the expansion, though Motorola's success in selling high-priced phones has made it a special favorite of Wall Street lately.

The company said it expects to make 33 cents a share for the fourth quarter on sales of $10.4 billion. That's in line with the Thomson First Call profit estimate and well ahead of the $10 billion Wall Street revenue estimate.

"Interesting that they guided revenue up, but left EPS in line. That could suggest that they may be getting a margin hit in the fourth quarter," says the money manager.

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