STRUGGLING Nokia Corp yesterday said its sales continued to drop in the second quarter, while it managed to reduce its net loss amid continuing cost-cuts.

The Finnish cellphone maker said second-quarter sales fell to 5.7 billion euros (US$7.49 billion) from 7.5 billion euros in the same period last year. Net loss for the April-June period was 227 million euros, compared to a net loss of 1.41 billion euros a year earlier.

The sales figures fell short of analysts' expectations - a poll of 30 analysts by SIX News had forecast sales of 6.4 billion euros. The company's share price fell 4.5 percent to 2.96 euros during lunchtime trading on the Helsinki Stock Exchange.

Sales of the company's flagship Lumia phones increased by 32 percent compared with the first quarter to 7.4 million handsets - but this was still at the lower end of analysts' expectations. Overall, Nokia sold 61.1 million phones in the quarter, down 27 percent compared with the second quarter in 2012.

Nokia said its devices and services sales in the world's largest devices market, China, fell by 57 percent to 232 million euros while sales in North America - the frontline of the smartphone market - dropped by 4 percent to 123 million euros.

Still, Nokia CEO Stephen Elop said the mobile phones business unit started to demonstrate "some signs of recovery in the latter part of the second quarter following a difficult start to the year."

He said the Lumia 520 has "enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam."