Finland's industrial flagship, Nokia, aims to become the world's number one mobile telephone maker following another record set of annual results on Friday.
Pre-tax profits surged 74 per cent to 14.6 billion markka (€2.46 billion), while sales jumped 51 per cent to 79.2 billion markka (€13.3 billion), the company's biggest-ever annual increase.
"It was our clearly superior product portfolio vis-a-vis our competitors . . . which made the difference," Mr Jorma Ollila, chief executive, told a news conference. "It is exceptional in our industry to have this type of growth figures."
Fourth-quarter profits jumped 75 per cent to 4.97 billion markka on the back of surging mobile phone sales, beating the consensus forecast of 4.7 billion markka by close to 6 per cent.
Nokia shares dropped at first on overblown expectations, but later rebounded to close up about one per cent at €128.5. "The results are slightly below the highest estimates . . . so some investors may feel a slight sense of disappointment," said Mr Douglas Smith, analyst at Salomon Smith Barney. "Overall, though, this is an excellent set of results."
Nokia's results far outstripped those of its two key rivals, Motorola, whose 1998 sales eased, and Ericsson, which posted 10 per cent sales growth on Thursday.
This superiority was especially visible in mobile phone sales, which soared 74 per cent to give an operating margin of 19.1 per cent, compared with 13.9 per cent in 1997.
Market capitalisation further reflected Nokia's march on its rivals, tripling to 375 billion markka last year - more than double the combined value of Motorola and Ericsson.
Europe accounted for almost 60 per cent of Nokia's sales, followed by about 21 per cent each in the Americas and Asia/Pacific.
The company said it would keep its sales growth target for this year at between 25 and 35 per cent and that it aimed to become the world leader in wireless equipment manufacturing.
"We are here to take a leadership position in some of the most attractive, fast-growing global communication business segments," Mr Ollila said.
Nokia said it sold 41 million mobile phones last year, out of a total of some 163 million sold by all makers. Mr Ollila said Nokia was unlikely to maintain this year's record profitability as competition toughened, but hoped it would maintain an edge.
"We have a superb platform compared to our competitors now, and, with our product launches this year, we will make sure that our products remain better also at the end of the year."
