* Q1 underlying EPS seen at -0.04 euros vs -0.08 a year ago
* Lumia shipments seen at 5.6 mln, up from 4.4 mln in Q4
* NSN telecoms equipment venture gaining strength
Finnish mobile phone maker Nokia is expected to have trimmed its losses in the first quarter, thanks to rising Lumia smartphone sales and a turnaround at its equipment venture Nokia Siemens Networks (NSN).
After falling behind Samsung and Apple in the smartphone race, Nokia is aiming for a comeback with the Lumia range, which uses Microsoft's Windows software, though it is still burning cash and remains a long way from the volumes shipped by the market leaders.
While Nokia still sells more regular mobile phones than smartphones, its future is likely to depend on higher-margin smartphones as a growing number of global consumers want access to apps such as Twitter from their handsets.
Nokia has recently launched the Lumia handsets in new markets such as China where consumers have been increasingly turning from regular phones to smartphones - principally its rivals'.
The market expects quarterly shipments of 5.6 million Lumia handsets, up from 4.4 million in the fourth quarter, according to a Reuters poll of analysts.
Its quarterly underlying loss, which excludes special items, is seen shrinking to 0.04 euros per share from 0.08 euros per share a year earlier.
While the improvement will take some pressure off Chief Executive Stephen Elop, who was hired in 2010 to lead a turnaround and took the decision to switch to the untried Windows software, analysts say it's too early to sound the all-clear, with Nokia's cash position expected to have fallen to 3.7 billion euros by end-March from 4.4 billion three months earlier.
Investors are also wary, saying the smartphone industry's top two players show little sign of ceding market share.
A separate Reuters survey showed the market estimates Samsung shipped around 61.6 million smartphones in the first quarter, while Apple shipped 36.9 million iPhones.
"Remember we're talking 4 million here with the Lumia. That's still very, very small," said technology stocks investor Inge Heydorn Sentat Asset Management, a fund that neither owns nor is short on Nokia stock. He said it would be hard to judge first-quarter results since supply shortages limited sales in the fourth quarter.
"Whether it's 5 million or 4 million, it's not clear how many of those are from inventory build-up in the last quarter," he said. "It's still a very difficult time for them."
Analysts on average expect Lumia shipments to pick up to over 7 million units next quarter, and any flagging of momentum would raise serious doubts over Nokia's future in smartphones.
Such uncertainty has weighed on Nokia shares, which last traded at around 2.63 euros, a far cry from their 65-euro peak in 2000.
While they are now double their lifetime low of 1.33 euros last year, they are still significantly lower than the 4-5 euros many analysts see as the sum value of the company's parts, which include its handset business, Navteq mapping unit and stake in NSN.
In addition to Lumia sales and cash burn, investors will be focusing on the recovery at NSN. Once a cash drain for co-parents Nokia and Siemens, NSN is now profitable thanks to restructuring, and as its focus on fourth-generation (4G) Long Term Evolution (LTE) networks has begun to pay off.
The turnaround has also raised hopes that NSN may be ready to be sold or publicly listed later this year. The joint venture agreement lapsed earlier this month, freeing both parties to sell their stakes without consulting each other.