UPDATE 3-Nokia's halting turnaround hit by weak handset sales

Thu Jul 18, 2013 11:30am EDT
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* Shipments of smartphones, regular handsets weaker than expected

* Net cash falls to 4.1 bln euros, in line with expectations

* NSN a bright spot as operating margin improves

* Nokia shares fall 4 pct (Recasts with comments from CEO, adds details on restructuring)

By Ritsuko Ando

HELSINKI, July 18 (Reuters) - Weak quarterly sales of Nokia smartphones raised the heat on CEO Stephen Elop, whose decision to adopt Microsoft's untested Windows Phone software has yet to deliver the recovery in the company's fortunes he was hired to achieve.

Nokia has pinned its hopes on its Lumia smartphones to close the yawning lead of the market frontrunners Samsung and Apple, but progress has disappointed many investors and analysts.

Nokia shares fell as much as 6 percent on Thursday after the company said it shipped 7.4 million Lumia phones in the second quarter, up 32 percent from the first quarter but fewer than the 8.1 million units forecast in a Reuters poll of analysts.

Analysts, some of whom had said Nokia needs to hit 10 million Lumia sales within the next few quarters to convince them it could survive in smartphones, said they were worried Nokia's Windows Phone models had come too late to the race.   Continued...