Nokia ( NOK) is heading into a seasonally weak period that is neither too hot nor too cold, leaving many analysts to believe its first-quarter earnings results will be just as tepid.

The Espoo, Finland-based handset maker is set to post first-quarter results Thursday before the opening bell. According to the Thomson First Call summary, analysts expect Nokia to post a profit of 57 cents a share on $19.84 billion in sales. While revenue has grown sequentially over the last three quarters, if the company posts sales in line with estimates, it would be a decline of nearly 13% from the previous quarter.

Nokia is coming off a sparkling fourth quarter where handset sales hit 133.5 million in shipments. Still, open interest in Nokia options is somewhat balanced with not a lot of volume, indicating that investors don't expect much out of the forthcoming earnings report. Shares of the company are already down 15% on the year, hampered by fears of an economic downturn.

Two examples came in March, when Texas Instruments ( TXN) lowered its quarterly forecast, saying demand for chips used in high-end, 3G cell phones deteriorated significantly. Not long after, Sony-Ericsson, the joint venture of Ericsson ( ERIC) and Sony ( SNE), warned of slowing sales in its line of midrange and high-end cell phones.

"We expect March to come in good, but not great, with guidance for 2008 industry units consistent with 10% growth forecasts," said American Technology Research analyst Mark McKechnie in a note. " Forecasts have been quite volatile, with high expectations going into the quarter and fear around Texas Instruments and Sony-Ericsson misses."

McKechnie expects a tough earnings season as many handset makers contend with post holiday inventory adjustments and macro economic concerns that have already hit companies like General Electric ( GE) and more notably Bear Stearns ( BSC).

However, a slight nod from Nokia CFO Rick Simonson at the end of March has calmed analysts and investors, instilling them with a bit of optimism.

"Whatever slowdown is happening in the U.S., we're less relatively affected than others," said Simonson during an interview with Bloomberg TV on March 25. "Europe is a mixed case and that's what we had as our expectation going into the year."

Simonson said that less than 5% of the company's business comes from the U.S. He added that growth in Brazil, Russia, India, China and Turkey have helped offset the weakness in Europe. Those BRIC countries have attributes that indicate high sales for mid- and high-end devices, he said.

Nokia "is preparing a major re-emphasis into the U.S., a market where the company historically had numerous challenges," according to RBC Capital Markets analyst Mark Sue. Because of this change, he expects the competition to chip away at Motorola ( MOT), which is already struggling to turn around its handset unit.

But there are still headwinds out there for the company. For one, its acquisition of navigation device maker Navteq ( NVT) may be in jeopardy after the European Commission said it is pushing further with an investigation into whether the $8.1 billion deal breaks antitrust regulations.

The average sales price per phone, or ASP, is also a concern for Nokia. In the fourth quarter, ASP fell to $121.70 from $130.50 a year ago. AmTech's McKechnie said that he expects to see "stronger units and solid margins partially offset by weaker ASPs."