Updated from 6:59 a.m. EDT

Nokia ( NOK) may be out of the woods, but it's still in the weeds.

Analysts expect to see signs that the crushing forces like slumping demand and rising inventories have eased a bit when the Finnish phone shop reports earnings before the bell Thursday.

By several analysts' estimates, Nokia started to see some stability return around the midpoint of the first quarter and business was solid through March. If true, that would end a particularly rough period for the world's top phone maker.

"We continue believing Nokia's first quarter report is going to come as a relief after some sensationally gloomy predictions over the past month," Global Crown Research analyst Tero Kuittinen wrote in a research note.

For a bit of a recap, Nokia shares tumbled last year as its collection of lackluster phones were found to be even less appealing to buyers already consumed by economic insecurity. Nokia's share of the smartphone market fell to 40.8% from 50.9% last year, as rivals like Apple ( AAPL) and Research In Motion ( RIMM) gained ground.

Nokia's stock reflected the troubles. It finished down 60% for 2008, and it's down another 11% this year.

There are some encouraging signs, according to Broadpoint AmTech analyst Mark McKechnie, including a revival of the Chinese market and the end of excess phone supplies in Europe.

Analysts expect Nokia to sell 90 million phones and post adjusted earnings, excluding one-time items, of 14 cents (Euro .10) a share on sales of $12.7 billion (Euro 9.56 billion) in the first quarter. That's a big drop from the pro forma profit of 58 cents on sales of $20.5 billion in the year-ago period.

Looking ahead, McKechnie expects phone sales to increase 5% sequentially in the second quarter as new phones and low inventory help boost Nokia's performance.

In the June quarter, analysts are looking for Nokia to bump up profit to 19 cents a share on $13.4 billion in sales.

Beyond that, Nokia is planning, as TheStreet.com first reported, a touchscreen assault with three smartphones due out in the second half of this year.

Nokia may have put its tougher days behind it, but there's plenty of economic turmoil still ahead.

More from Technology

Tesla's Supercharger Network Is Booming -- Here's Why That's a Concern

Tesla's Supercharger Network Is Booming -- Here's Why That's a Concern

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

Listen: Should You Buy Cisco Now?

Listen: Should You Buy Cisco Now?

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense