Its adjusted operating profit for the quarter was 1.12 billion euros, an increase of 12 percent on the previous year and surpassing analysts' predictions of 1.0 billion euros. "We saw the second consecutive quarter of year-on-year sales growth across all five of our Networks business groups, as well as improved profitability in both Networks and Nokia Technologies," Nokia chief executive Rajeev Suri said in a statement.
Nokia's outlook for 2020 remains "clearly positive", the firm said, due to strong market conditions driven by the growth of 5G. However, Nokia forecast a "soft first half" of 2019 due to the staggered timetabling of its 5G rollout projects. Nokia's share price fell by 5 percent on the Helsinki stock exchange in midday trading.
The performance of Nokia's networks division, which represents 90 percent of its revenues, proved particularly strong in the final quarter of 2018. Net sales for the division were 6.2 billion euros for the period, a year-on-year increase of seven percent, compared to a three percent increase for the group as a whole. Nokia Networks also reported 30 percent year-on-year growth in its quarterly operating profit, up to 841 million euros.
Despite a 30 percent decrease in earnings per share over 2018 compared to the previous year, Nokia announced a dividend of 0.20 euros per share for the year, up from 0.19 in 2017. Nokia reported having reached its cost savings target of 1.2 billion euros between 2016 and 2018, in part by consolidating with Alcatel-Lucent, which Nokia acquired in 2016. In October the company announced a further 700 million euros of savings by 2020, of which 500 million are expected to come from operating expenses.