HELSINKI (AFP) - The world's top mobile phone maker Nokia said Thursday its fourth-quarter profits plunged 21 percent, but still beat analyst expectations, while its annual result was up somewhat.

Following the news, Nokia shares fell 5.96 percent to 7.33 euros on a Helsinki stock exchange down 0.16 percent.

For the October-December period, the company posted a net profit of 745 million euros ($1.02 billion) down from 948 million a year earlier, on sales up six percent at 12.65 billion euros.

"Growth trends in the mobile devices market continue to be encouraging," Chief Executive Stephen Elop said in the earnings report, but acknowledged that "Nokia faces some significant challenges in our competitiveness and our execution."

The fourth quarter result nonetheless beat the expectations of analysts polled by Dow Jones Newswires, who had expected a 45-percent drop in net profits to 526 million euros and only a 3.0-percent hike in sales to 12.35 billion.

Nokia meanwhile posted a net profit for the year of 1.85 billion euros, up from 891 million a year earlier.

The company also said it had lost market share during the year, falling to 32 percent of the global market in 2010 from 34 percent a year earlier.