Nokia, the world's largest maker of mobile phones, quashed fears the economic slowdown would undermine earnings after reporting a 13 per cent year-on-year rise in earnings per share for the second quarter and increasing its sales forecasts.

The Finnish company said net sales rose 4 per cent to €13.2bn ($20.9bn) in the quarter while its operating margin rose from 11.1 per cent in the second quarter of 2007 to 14.7 per cent, even though the average price of its handsets fell to €74 from €79.