updated 1/18/2005 5:01:30 PM ET 2005-01-18T22:01:30

Motorola Inc. rode strong sales of its 20 new cell phones to a 34 percent increase in fourth-quarter profits, capping a resurgent year under new CEO Ed Zander.

Both earnings and sales reported Tuesday by the world’s second-largest handset maker behind Nokia handily outpaced Wall Street’s expectations.

Net earnings for the last three months of 2004 were $654 million, or 27 cents per share, compared with $489 million, or 20 cents per share, a year earlier.

Excluding results from discontinued operations — the money-losing chip business it spun off into Freescale Semiconductor Inc. last month — earnings were 28 cents per share. That was 4 cents better than the consensus estimate of analysts surveyed by Thomson First Call.

Revenues rose 27 percent to $8.84 billion, easily topping the $8.46 billion predicted by analysts. A year earlier, revenues were $6.94 billion.

Zander cited an “enthusiastic” reception to the new portfolio of products launched by the Schaumburg, Ill.-based company — particularly its much-advertised, ultra-thin Razr handset, which he said “greatly exceeded sales expectations.”

He said Motorola picked up about three percentage points of market share in the quarter, solidifying its No. 2 position behind Nokia.

Analysts have said that both Motorola and Nokia appear to have gained at the expense of No. 3 Samsung Electronics Co. Ltd., where profits fell 2 percent in the fourth quarter as it was slow to get new handsets to market.

Motorola shares were down 2.6 percent in after-hours trading after closing up 40 cents, or 2.3 percent, at $17.43 on the New York Stock Exchange in anticipation of superior results. The stock is slightly above the midpoint of its 52-week trading range.

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