As the old rule goes, "underpromise, overdeliver." You always want to make conservative predictions about the uncertain future, but if you can thrill the market with a surprise gift of better-than-expected earnings from time to time, then bully for you. It's the investor relations equivalent of Berkshire Hathaway (NYSE:BRK.A) chairman Warren Buffett's instruction to his managers to "delight your customers."

Yesterday, Finnish telecom Nokia (NYSE:NOK) delighted its investors. And judging from its financial performance over the past three months, I'd hazard a guess that customers have been pretty pleased as well. Defying the Street's conventional Wisdom (large "W"), Nokia's sales actually rose 1% in the third quarter, to 6.9 billion euro (in comparison to Q3 2003). Moreover, absent continued weakness in the U.S. dollar, sales would have risen 8%. Not bad for a company that has been slashing prices on its phones in a battle to regain lost market share. Mobile phone sales may have fallen 13%, but other divisions of the company's business picked up the slack and secured an overall increase in sales.

Analysts also predicted that Nokia would earn just 0.13 euro for the quarter. Again, the company beat expectations by earning 0.14 euro. The fact that this was down from its year-ago performance was given short shrift, as that assumption had already been priced into the company's shares.

Now comes the fun part. Nokia's shares got a considerable (1.7%) boost on a very gloomy day for the market at large. A lot of that can be chalked up to the company's admirable financial performance this quarter. But even more important to Wall Street's vote of confidence, I suspect, was Nokia's raising its promise of revenue gains for Q4. Whereas analysts were expecting Nokia to sell no more than 8.2 billion euro in goods and services next quarter, Nokia is promising about 8.5 billion euro.

So is Nokia now foolishly (small "f") jumping off the underpromise bandwagon? Speaking as a Nokia shareholder, while I admire the long-term focus taken by companies such as Coca-Cola (NYSE:KO), Gillette (NYSE:G), and The Washington Post (NYSE:WPO), which decline to give quarterly earnings guidance (a position perhaps recently abandoned by Coke), I also appreciate Nokia's stream of updated earnings and sales guidance in recent years. The company seems to stand by its predictions and, when events overtake them, to quickly let investors in on the news. Taking all that into consideration, I wouldn't be at all surprised to see Nokia overdeliver once again come January.

Can't get enough of Nokia news? Read the saga of its courtship of Symbian. It's long enough to tide you over till the next earnings report comes out:

Fool contributor Rich Smith owns shares of Nokia, but of no other company mentioned in this article.