Nokia has released their first quarter earnings report and the news is, to say the least, not good. Despite posting net sales of €7.3 billion ($9.6 billion), the company suffered net losses of €1.34 billion ($1.7 billion). The company cited “greater than expected competitive challenges” and “restructuring activities” as the primary culprit in its losses. Nevertheless, the company retains a decent cash reserve of €4.9 billion ($6.4 billion).

The report also mentions the company’s plans moving forward. Citing the “encouraging” launch of the Lumia 900 just last week, they stated their intention to continue expanding the Lumia lineup, both in terms of new models aimed at both higher and lower price points, and in terms of countries in which their phones are offered. Nokia smartphones are currently available in 45 countries, 31 of which were added in the first quarter. They also stated their intention to expand their feature phone portfolio with seven new models.

Stephen Elop, Nokia’s CEO discussed some of the challenges his company is facing. He noted that the devices that made Nokia a major player in the mobile phone industry – feature phones – have been facing significant challenges in the market, even at lower price points, from smartphones. Nokia, Elop said, has “a clear sense of urgency to move our strategy forward even faster.” Encouraged by the sales of Lumia devices in the U.S. and other markets, he said that Nokia’s strategy includes expanding its presence in the market, stepping up advertising efforts, and paying careful attention to customer feedback, particularly feature requests.

The Lumia 900 launched last week and has been generally well-received. Sporting a fairly impressive feature set and Windows Phone 7.5, the phone has sold fairly well – better than expected in the U.S., according to Elop’s statement. Nokia and Microsoft are expecting great things from the Lumia 900, which could provide both companies a much-needed inroad into a smartphone market dominated by Apple’s iOS and Google’s Android.

As far as Nokia’s plans for increasing their advertising, you may have noticed the following commercial in the last week or so. Apparently with the Lumia 900, the five-year beta test that started with the iPhone is finally over. Or something. Check it out, then let us know what you think about Nokia’s future (and the Lumia 900, if you’ve got one) in the comments.

The full report can be read here.