Wall Street analysts project that Nokia Corporation (NYSE:NOK) will continue to post losses during its third quarter earnings, before the opening of trading in New York (1:00 PM, Finnish Time) on Thursday, October 18.

Based on the research note released by Michael Schroder, investment analyst from FIM, Nokia Corporation (NYSE:NOK) is expected to report EUR 6.9 billion sales, a 23 percent decline year-over year. The research firm estimated that the Finnish company will report and EBIT loss of EUR 301 million, and an EPS loss of EUR 0.08.

Schroder said, Nokia’s smartphone business in the third quarter will remain “heavily loss making.” He expects the company’s net cash flow to decline by 460 million euros. The company will end the quarter with a net cash flow of  EUR 3.7 billion.

Schroder’s estimate for shipments of  Lumia smartphones during the third quarter is 3 million units, below the 3.5 consensus estimate of analysts compiled by Reuters as consumer demand started to slowdown following the announcement of Microsoft Corporation (NASDAQ:MSFT) in June that there will be no upgrade path for the Windows Phone 8 operating system.

According to Schroder, the Nokia smartphones (Lumia 920, Lumia 810 and Lumia 8X) will “follow a very similar pattern to last year’s Lumia launch; starting gradually, with select markets and the availability being limited to the last six weeks of the quarter.” In addition, he believes that Nokia will not be able to meet the analysts estimated average shipment of 5.5 million units for Q4 2012. The volume for the Lumia models will be similar to the 1 million total shipments of Nokia Lumia 800 and 710 last year.

On the brighter side, Schroder believes that Nokia’s feature phone will continue to demonstrate strong momentum. He said, “The next couple of quarters will be critical for the future of Nokia Windows Phone strategy. There will be no lack of publicity when Microsoft, the OEMs, and the carriers start to throw hundreds of millions of promotions, but genuine consumer acceptance is required to secure a place as the third ecosystem.”

The smartphone market is currently dominated by Apple’s (NASDAQ:AAPL) IOS and Google’s (NASDAQ:GOOG) Android OS, based on the smartphone market survey conducted by technology research firm comScore, during the three months period ending in August. Samsung Electronics Co. Ltd (LON:BC94) remained as the largest smartphone manufacturer.

On the other hand, analysts from Zacks Investment Research believe that Nokia failed to boost its smartphone sales due to strong competition from Apple and Samsung Electronics. Zacks analysts expect Nokia to report a loss of 12 cents for 3Q 2012, a decline of 405.26 percent from its earnings during the same period last year. The analysts still believe that Nokia is a strong brand, with a portfolio of more than 30,000 patents and 10,000 patents in innovations.

According to Zacks Investment Research, Nokia’s plan to reduce its patent assets, 10,000 job cuts, and to shut down its three facilities will help the company to recover from its financial difficulties. The analysts maintained their long-term “neutral” rating for Nokia stock.

Meanwhile, analysts from research firm SEB Enskilda expect Nokia Corporation (NYSE:NOK) to report a non-IFRS EPS loss of EUR 0.10 for the third quarter, and its net cash to decline to EUR 3.74 billion. The shipments for Nokia Lumia smartphones will slide from 4 million to 3.5 million units. Analysts believe that the Windows Phone 8 strategy will not help Nokia’s recovery in the smartphone market during the third quarter. Analysts initiated a “hold” rating for the company’s stock.

Nokia Corporation (NYSE:NOK) reported $9.23 billion (EUR 7.5 billion) net sales and incurred approximately $1 billion (EUR 826 million) in operating profit $1 billion in its second quarter earnings last July. The company also posted a non-IFRS EPS loss of EUR 0.08, and ended the quarter with a net cash of EUR 4.2 billion.