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Nokia posted a big loss in the second quarter, almost four times its loss from a year ago, but reported better-than-expected shipments of its Lumia line of Windows Phones — an encouraging sign, at least, for the mobile phone maker’s high-stakes partnership with Microsoft.

The company reported the results this morning. Share of Nokia are up sharply on the news in trading overseas.

The company shipped 4 million Lumia’s in the second quarter.  That compared with about 2.2 million in the first quarter, according to estimates reported by the New York Times. Nokia’s overall loss for the quarter was 1.4 billion euros, or about $1.7 billion, compared with a $450 million loss a year ago.

Led by CEO Stephen Elop, the former Microsoft executive, Nokia is transitioning from the Symbian operating system to Windows Phone, and has seen its business erode significantly in the face of competition from Apple’s iPhone and makers of Android devices.

The company’s challenges were increased by the recent news that Microsoft’s next version, Windows Phone 8, won’t run on existing Windows Phone 7.5 devices, making the existing Lumia line less enticing for prospective customers. Elop addressed that issue in the earnings report, signaling plans to make Windows Phone 8 devices and continue supporting the existing Windows Phone 7.5 lineup.

Elop said, “We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over  time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia.”

Numbers released by Nielsen last week showed the Lumia line capturing a relatively small 0.3 percent of the U.S. smartphone market thus far The price of the flagship Nokia Lumia 900 was recently cut in half to $50 in the U.S., not a good sign so soon after its April launch.

Update: Research by Strategy Analytics shows that the timing of the Lumia price cut is actually in line with other smartphones. Thanks to Robert McLaws for pointing this out.

Microsoft reports its quarterly earnings later today. The Redmond company traditionally doesn’t disclose total Windows Phone unit sales.

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