NEW YORK (CNN/Money) - When is an earnings warning not really bad news? When you're warning about a business that most people have written off for dead anyway.

Nokia, the world's largest cell phone maker, reported better than expected first-quarter earnings Thursday but warned about second quarter results. The stock initially dove in Europe on the news until the company explained why it was warning.

The company said second-quarter earnings would be lower than expected due to a restructuring charge it would take to reflect layoffs at its struggling network equipment division. Nokia announced the job cuts last week, and it's no mystery that this business is a mess since telecom service providers worldwide have cut back on their capital spending.

Excluding the charge, Nokia's second quarter looks solid. The company said that handset sales should increase between 4 percent and 12 percent from last year. Plus, Nokia stuck to an earlier forecast of 10 percent industry growth in cell phone shipments for the year.

As a result, shares of Nokia quickly reversed course in Europe. And Nokia (NOK: Research, Estimates)'s American depositary shares (ADS) rose nearly 5 percent in early trading on the New York Stock Exchange.

Greg Teets, an analyst with A.G. Edwards & Sons, says Nokia's news looks especially good when you compare it with the latest earnings report from rival Motorola. Both Nokia and Motorola have seen the average selling prices of cell phones decline as of late because consumers are buying more low-end phones, Teets said. Teets owns shares of Nokia but his firm has no investment banking relationship with the company.

But Nokia is able to carve out a greater profit from its handset business because of greater efficiencies. Operating margins for Nokia's handset division were 24 percent in the first quarter, compared to just 4 percent for Motorola's cell phone division.