Finnish handset manufacturer Nokia posted better than expected profit in the three months to 31 December 2002 but quickly choked off any premature over-enthusiasm by warning of a predicted decline in sales in the first quarter of 2003, due to flagging demand for handsets and its loss-making networks unit. Nokia reported revenues of EUR8.84 billion in the fourth quarter, up 1% year-on-year, while net profit rose by 8% to EUR1.25 billion, or EUR0.26 per share, beating its own target of between EUR0.23 and EUR0.25. However, the company added that it expects its earnings per share in the first quarter will fall in the range of EUR0.15 and EUR0.19 which, even at its most optimistic, only matches the EUR0.19 per share reported in Q1 2002. Nokia says that sales of mobile phones will only grow by up to 9% due to tough trading conditions, while overall revenue growth for the group will be below that figure. The vendor achieved a handset market share of 39% in the fourth quarter – and a 38% share overall in 2002 – but has warned that sales of its colour screen and MMS units are lower than hoped as customers opt instead for cheaper models. Meanwhile the group’s ailing networks division, Nokia Networks, posted an operating loss of EUR82 million in the period in review, from a loss of EUR73 million a year earlier despite a 6% increase in sales to EUR2.1 billion.