Two weeks before it is scheduled to report its fourth quarter earnings, Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is already feeling some optimism for its new Lumia smartphones.

Stephen Elop CEO Nokia

Last Thursday, Nokia’s Chief Executive, Stephen Elop, spoke to analysts and the media and revealed that from strong Lumia sales, the company’s smartphone shipments had increased–something not seen in a year–even though this comes with numbers lower than the previous year, reported The Wall Street Journal.

In the fourth quarter, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) reported that 4.4 million Lumia devices had been shipped, bringing total smartphone shipments up to 6.6 million.

Elop added that the company’s speed for cost cutting and greater results from its wireless networks joint venture will assist Nokia to “achieve underlying profitability in the fourth quarter.”

But one area that the executive did not delve into was the company’s liquidity.

This have been concerns as cash has been getting smaller for Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), after it announced its decision to embrace Microsoft Corporation (NASDAQ:MSFT)’s mobile device operating system. At September’s end, Nokia had a €3.6 billion ($4.8 billion) cash position, down from late 2010’s €7 billion when Elop took the helm.

The company has tried to change the cash problem after its six quarters with losses. It recently added €170 million of cash after the sale of its headquarters building to the Finnish property investor Exilion Capital Oy; it included a long-term lease. This deal followed a €750 million bond offering to raise cash.

Other initiatives to raise cash includes the sale of patents and business divestitures –such as a December optical-network unit sale by its Nokia Siemens Networks arm along with its Vertu luxury phone unit; this has had been purchased by a Swedish private-equity firm in 2012, reported The Wall Street Journal.

In addition to its cash problem, the bigger question may be; can Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) roll the dice on its Lumia phones to steer it in the right direction in a highly-competitive smartphone marketplace?

Yes, shipment numbers look good for the Lumia phone but other factors need to be factored into the equation.

First up is pricing.

During the holiday season using deep discounts, U.S. consumers found the Lumia phone on sale for $39 on, Inc. (NASDAQ:AMZN); this was $60 less expensive (39%) than the original sticker price. Other low end  Lumia phones  could be found for free at carriers on two year-contracts; this included T-Mobile USA and Verizon Communications Inc. (NYSE:VZ).

Nokia’s chief financial officer, Timo Ihamuotila, had an answer for this, noting in the fourth quarter an average smartphone selling price was €185, higher than the third quarter’s €155. He didn’t include average Lumia prices.

Then there’s a supply issue.

Elop said there’ve been problems with supply, such as shortages in mobile components, but Nokia hasn’t been alone in this.

He said via The Wall Street Journal, “Demand for our products has been greater than the available supply. If you went into a store to buy a new Nokia, there were times when our devices weren’t available, so indeed we could have sold more Lumias.”

But don’t expect the company to paint an entirely sunny picture in their Jan. 24 4Q report. It believes its main devices and services unit—primarily comprised of feature phones—will undergo a sales decline in the quarter to €3.9 billion, as compared to the previous year’s €6 billion.

Total device shipments have been estimated at 86.3 million units, lower than the previous 113.5 million.

Today, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s stock is up 1.00%, trading at $4.67.