The company posted a loss of 488 million euros ($532 million) in the first quarter, an improvement from the 609 million euros a year earlier, prompting chief executive Rajeev Suri to say he believed in an "improving business momentum, even if some challenges remain".
Investors agreed with that assessment, sending Nokia's share price more than six percent higher on the Helsinki stock exchange to 5.29 euros by late morning.
While the company's overall sales declined by two percent to 5.38 billion euros, sales in its core networks business fell by six percent, to 4.9 billion euros.
An analyst at Aurel BGC, a Paris brokerage, called the results "quite reassuring" because investors had been expecting a steeper decline in networks revenues.
"Markets have known for a long time that the trend is not very good," he told AFP.
Most importantly, profit margins were better than those generated by Swedish rival Ericsson, the analyst said. "We saw encouraging signs of stabilisation in mobile networks," Suri meanwhile told reporters in a conference call.
The company is eyeing business opportunities offered by the "path to 5G roadmap", Suri said, referring to the world-wide rollout of the lightning-fast 5G mobile internet service that operators expect to begin by 2020.
Once the world's number one handset maker, Nokia transformed itself into a network equipment company and bought its hugely unprofitable French-American rival Alcatel-Lucent a year ago, sending the whole group's results plunging into the red in 2016.
The firm recorded a net loss of 766 million euros last year, which Suri said in a statement was a "year of transition."
But in fact the company has been going through a process of radical transformation for several years now.