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Nokia Market Share Rises

A strong second quarter sends shares higher.
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Nokia (NOK) - Get Nokia Oyj Sponsored ADR Report shares rallied after the handset giant posted strong second-quarter numbers.

The Espoo, Finland-based wireless company made 2.83 billion euros ($3.88 billion), or 72 euro cents a share, up from the year-ago 1.14 billion euros, or 28 euro cents, a year earlier. Sales rose 28% from a year ago to 12.59 billion euros ($17.25 billion). Diluted earnings in the latest quarter were 32 euro cents a share (44 cents U.S.).

Analysts surveyed by Thomson Financial were looking for a 37-cent (U.S.) profit on sales of $16.8 billion. The news sent the stock up 7% in London.

"Nokia continued to grow in the second quarter thanks to an excellent performance from our device businesses," the company said. "Nokia's share of the global device market improved to an estimated 38%, while operating margins in our device businesses were at their highest level in three years. Diluted EPS was up 39% year on year, excluding special items."

The news comes as Nokia continues to benefit from the retreat of rival

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, whose handset business continues to lose money and market share following its failure to roll out a popular successor to the once-hot Razr phone.

Nokia said it sold 101 million handsets in the latest quarter, up 11% from first-quarter levels and up 29% from a year ago. The company said its average handset selling price rose to 90 euros from 89 euros in the first quarter.

The company said it posted its strong numbers in spite of continued troubles at its Nokia Siemens infrastructure joint venture, where operating margin was negative 10.5% in the latest quarter. The companies accelerated their cost-cutting program and said they aim for an additional 500 million euros in annual synergies. They don't expect double-digit operating margin for the venture this year.

Nokia said now expects industry mobile device volumes in 2007 to grow by 10% or more from the approximately 978 million units Nokia estimate for 2006. Its previous estimate for the industry mobile device volume growth in 2007 was up to 10%. Nokia expects some decline in industry ASPs, primarily reflecting the increasing impact of the emerging markets and competitive factors in general.