When you're the king of handsets, no one cares if your networking business stinks.

So it is with

Nokia

(NOK) - Get Report

. Despite a slight pullback on second-quarter financial goals and a predicted 15% decline in 2003 network infrastructure sales, Nokia enjoyed a lovefest with its many fans Thursday, cashing in to the effect of a 6% jump that took the stock up $1 to $16.18.

The Finnish tech juggernaut's first-quarter earnings report and conference call showcased its heralded balancing skills. For nearly every weakness, Nokia bulls found a counterbalancing strength: Sliding handset sales in Europe and North America were conveniently offset by strong sales in China.

Declines in sales of time division multiple access, or TDMA, phones were more than overcome by sales growth in code division multiple access, or CDMA, handsets. Market share slipped a percentage point -- but wouldn't you know it, the company predicts an increase this year.

Even in conceding that network infrastructure business was sinking fast, a conclusion many on Wall Street had reached a few quarters ago, Nokia gained the upper hand by promising to reduce the size and cost of the operation. While accounting for only 20% of Nokia's business, networking gear has been a drag on the company's performance. The company says it will take a 6-cent second-quarter charge to write down a portion of the networking equipment business.

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Investors were also encouraged by Nokia's strong operating margins on handsets at 24% and the promise of a robust upgrade cycle ahead as consumers warm to new color-display phones.

Of course, there are trends even Nokia can't explain away. And with employment statistics stagnating and the economy continuing to soften, there are those who would point out that fancy phones won't necessarily make the top of everyone's shopping list.

"I think we will see a more muted but longer buying cycle this time," says Justin McNichols, a money manager with Osborne Partners Capital Management. "When the economy was better, the cycle was about 18 months. I think this time it will take twice as long to get there." McNichols is long Nokia.

Nokia's efforts to keep Wall Street focused on the big picture certainly helps keep attention away from woes of today's wireless market.

"I'm really surprised Nokia's up so much today. No one's raising their numbers or anything," says a hedge fund manager based in New York with no Nokia positions. "I think people are just going with Nokia because -- what else can you do? You don't want to buy

Ericsson

or

Motorola

."