Image caption Nokia sold 7.4 million Lumia phones in the second quarter

Nokia shares have tumbled 4% after the company released weak second quarter sales.

The mobile phone company reported sales of 5.69bn euros ($7.46bn, £4.92bn) for the three months to the end of June, down 24% on the same period last year.

The company sold 53.7 million mobile phones during the quarter, down 27% on last year.

Sales of its new Lumia phones, which run a Microsoft operating system, rose to 7.4 million in the second quarter.

Analysis Nokia's Stephen Elop celebrated a strong start for the Lumia 520, the budget phone in the range - but overall smartphone sales of 7.4 million units disappointed analysts. Having poured huge sums into trying to crack the US market, sales of half a million phones in this quarter was a meagre return. The one bright spot is that at least Nokia's smartphones outsold Blackberry in the last quarter - in the battle for third place behind Samsung and Apple they may be ahead. Whether that will prove a profitable place to be is another matter.

That is a rise of 21% from the 6.1 million sold in the first quarter.

Nokia's chief executive, Stephen Elop said: "We are very proud of the recent creations by our Lumia team.

"During the third quarter, we expect that our new Lumia products will drive a significant part of our smart devices revenue."

However, that improvement has to be put into perspective, as Apple sold 37 million iPhones in the first three months of the year.

"Despite massive restructuring and a shift in platform, it still feels like Nokia is treading water compared to heavyweight smartphone makers Apple and Samsung who completely dominate the smartphone business," said Ben Wood, an analyst at research firm, CCS Insight.

The other problem for Nokia is that sales of non-smartphones, called feature phones, are also under pressure.

Nokia sold 53.7 million of them in the second quarter down 27% on 2012.

That market is being hit by cheap rival phones powered by Google's Android operating system.

Overall Nokia's losses narrowed to 278m euros, compared with a loss of 1.5bn euros in the same quarter last year.

'Surprisingly strong'

Sales also fell at the operation that makes equipment for the mobile phone industry called Nokia Siemens Networks.

It saw a drop in revenue of 17% to 2.78bn euros, partly because Nokia sold some parts of the unit.

But some analysts think this business will provide important support in the future.

"Nokia Siemens Networks (NSN) was surprisingly strong. Looking at NSN's cash flow and results, the business seems to be a decent back-up plan for Nokia," said Hannu Rauhala, an analyst at the Finnish firm, Pohjola Markets.