HELSINKI — Finnish telecoms equipment maker Nokia published better-than-expected fourth-quarter results on Thursday, but revised downward its forecast for its networks business in early 2019.

Nokia reported a profit of 193 million euros ($221 million) for October-December last year, marking a strong end to an otherwise challenging year, and a notable improvement on the same quarter a year earlier, when the firm posted a loss of 386 million euros.

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 own outlook for this year was fairly conservative and below expectations," Mikael Rautanen, an analyst at Finnish market research firm Inderes, told AFP.

"Nokia's last year was quite challenging so they are lacking some investor confidence at the moment, and today's report will not restore the investor confidence in Nokia fully," Rautanen said.

"If I compare with Ericsson's results last week, I would say the tone in their overall market comments was more positive and more optimistic than Nokia," Rautanen added.

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.

"The benefits from the savings and Alcatel integration are starting to kick in. But still the reality in this market is that you have to continuously keep your cost level in good shape in order to maintain your competitiveness," analyst Mikael Rautanen said.

Earlier this month Nokia announced the reduction of 460 Alcatel-Lucent posts in France, the third round of restructuring at the subsidiary since 2016. — AFP