Nokia's annual profit rose by 46 per cent to €7.9bn (£5.9bn) last year, from €5.5bn (£4.1bn) in 2006.
The company sold one in four mobile handsets globally in 2007, a performance
helped by strong sales in emerging markets such as China and India.
And it will continue to expand in the coming year, said Nokia chief executive
Olli-Pekka Kallasvuo.
"Facing a market that remains intensely competitive, we are continuing to improve our leading device portfolio as well as execution ," he said.
"With this we believe Nokia is well positioned for growth in 2008."
Shares in Nokia rose 14.6 per cent to €23.74 (£17.65) on publication of the results.
The company predicts mobile device shipments in the coming year to grow by around 10 per cent from the 1.14 billion units shipped in 2007.
Rival Motorola made a loss of $0.55bn (£0.28bn) in 2007, and lost its position as the world's second largest mobile phone maker to Samsung over the last year.
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