Nokia has reported a reduced loss of 227 million euros ($A325 million) in the second quarter, but sales again fell sharply.
The loss was 84 per cent less than in the same period last year, but sales fell by 24 per cent to 5.695 billion euros.
The decline in sales of traditional mobile phones continued, dropping 39 per cent from the level a year earlier, while smartphone sales were down 24 per cent over the same period.
"Sales of low end phones - a cash cow - collapsed," said Eric Beaudet, an analyst at investment bank Natixis.
"It's worrying because this division needs to be profitable in order for them to manage the transition (to high end phones)," he said.
Sales of Lumia, the smartphone on which the troubled company has bet its future, rose by 32 per cent from the previous quarter to 7.4 million units.
But analysts had expected more.
"Lumia sales were slightly lower than expected," said Hannu Rauhala, an analyst at Finnish bank Pohjola.
Mikael Rautanen of equity research provider Inderes was disappointed by the Lumia's average selling price, which at 157 euros per unit was significantly lower than his own expectation of 175 euros.
Nokia chief executive Stephen Elop said the phone was "showing increasing momentum".
"During the third quarter, we expect that our new Lumia products will drive a significant part of our smart devices revenue," he said in a statement.
Nokia used to be the global leader in making mobile phones but has been overtaken by rivals and is struggling to establish winning business models and mobile devices.
Shares in the company were 4.45 lower in late afternoon trading on the Helsinki bourse, where the main index was down 0.66 per cent.
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