HELSINKI, Finland — NOKIA said that its third-quarter net loss widened to ¤969 million ($114 billion) as revenue plunged 19 per cent compared with the same time last year and sales of its flagship Windows Phone fell to under three million units. Investors, however, had been expecting an even bigger drop in sales, and sent shares in the company higher.

Net sales dropped to ¤7.2 billion, and Nokia gave a grim outlook for the rest of the year as it prepares for this fall's launch of Microsoft's new phone software, Windows Phone 8.

The struggling company conceded that it did not expect great gains from the launch, which includes new Windows- based Lumia phones, and described the fourth quarter as "challenging ... with a lower-than-normal benefit from seasonality in volumes".

In 2011, Nokia reported a third-quarter net loss of ¤68 million on revenues of

¤8.9 billion.

While the loss was deeper than analysts' forecast for a ¤610 million shortfall, sales beat expectations of ¤6.99 billion. Nokia's share price was up more than five per cent at ¤2.31 in afternoon trading in Helsinki.

Analyst Hannu Rauhala from Pohjola bank in Helsinki said Nokia's performance had been a mild surprise.