Nokia Corporation (NYSE:NOK) reported its third quarter earnings Thursday morning. Wall Street analysts expected the Finnish mobile device manufacturer to continue to post losses, as it struggles to emerge from financial difficulties. The company is short of cash and faces strong competition against its rivals, such as Apple Inc. (NASDAQ:AAPL) and Samsung Electronics (KS:005930) in the smartphone market.

Nokia

The company posted Eur 7.24 billion net sales, down by 4 percent compared with the Eur 7.54 billion net sales in the second quarter. Nokia Corporation (NYSE:NOK)’s earnings per share (EPS) losses were Eur 0.07. The result is better than the expectations of analysts.

During the third quarter, Nokia’s smartphone shipment was only 6.3 million, including 2.9 million Lumia units, compared with the 10.2 million units shipped during the previous quarter. Its smartphone volume was affected by losses in Symbian devices, particularly in China.

The surprising part in Nokia Corporation (NYSE:NOK)’s financial statement was the positive performance of its networking business. The net sales of Nokia Siemens Networks increased by 5 percent, to Eur 3.5 billion, compared with its Eur 3.34 billion net sales in the second quarter. The company’s Asha full touch smartphone also showed strength, with 6.5 million shipments. Nokia ended the third quarter with Eur 3.6 billion net cash.

Analysts from Oppenheimer Equity Research believe that Nokia Corporation (NYSE:NOK) will be able to sustain the positive performance of its networking business and the strength of Asha, until next year. According to them, Nokia’s available cash on hand will help the company in its smartphone transition. Analysts also think the launching of the new Lumia 920/820 powered by Windows Phone in November, will provide the company with a pathway to recovery.

According to them, the new Lumia hardware is good, but they are still skeptical of its ability to compete against Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG). They said, “While Lumia hardware is competitive, today’s consumers buy ecosystems, not hardware. We see little in Windows 8 to drive consumers to give up on iOS and Android.” They recommend investors to stay sidelined, until they see real evidence of smartphone traction.

Analyst from RBC Equity Research advise investors to wait and see, due to mixed feedback of consumers on the Nokia Corporation (NYSE:NOK)’s new smartphones.