Nokia Oyj (NYSE:NOK), the one-time king of the smartphone market, has finally returned to profit, it reported Thursday. But to stay that way, it’s eliminating its dividend and hoping a two-year-old alliance with Microsoft Corp. (NASDAQ:MSFT), the No. 1 software company, will finally pay off.

The Finnish smartphone maker, which once had nearly 30 percent of the global mobile phone market, has only about 3 percent now, estimates market researcher IDC. Together, Samsung Electronics Corp. (KRX:005930) and Apple Inc. (NASDAQ:AAPL), the most valuable technology company, have a combined 80 percent.

Now, CEO Steve Elop said, the company hopes its new Lumia phone line, which runs exclusively on Windows 7 and 8 from Microsoft, where he was a senior VP, will keep selling at a faster pace after all the steps taken last year to cut costs, including 20,000 layoffs, closing factories, patent sales and even selling the headquarters complex in Espoo, outside Helsinki.

The company sold only 4.4 million Lumias last quarter as total mobile phone sales fell to only 86.3 million, compared with 113.5 million total units in the year-earlier period. The company also sold 2.2 million smartphones based on the European Symbian OS, which it plans to stop supporting over time.

By contrast, Apple reported sales of 47.8 million iPhones in the same period. Moreover, next week BlackBerry developer Research in Motion (NASDAQ:RIMM) plans to finally ship its BlackBerry 10, another device aimed at recapturing market share for the Canadian rival.

Nokia’s fourth-quarter net income was €202 million (US$270.1 million), or 5 cents per share, reversing the prior-year loss of €1.07 billion, or 29 cents. Revenue fell 10 percent to €8.04 billion.

“For investors, it was a solid quarter in which we removed concerns about our cash situation,” said Elop, 49, a Canadian computer engineer who had worked for Macromedia before its acquisition by Adobe Systems (NASDAQ:ADBE), Juniper Networks Inc. (NASDAQ:JNPR) and Microsoft, where he was head of the unit that sells Microsoft Office until 2010.

Cancelling the dividend after 140 years is intended to save about €750 million from the company’s cash and investments of €4.4 billion and to “ensure strategic flexibility,” the company announced.

Naturally, the dividend omission irked investors, sending Nokia shares down more than 8 percent to $4.26, down 38 cents, on Thursday, still a far cry from their 52-week low of $1.63.

They fell another 1 percent Friday to $4.20, down 6 cents. The two-day pounding brings the loss on the company’s American Depositary Receipts to 14 percent, including the former dividends, over the past year.

Analysts were skeptical. “I still think it is far from certainty that this turnaround will be a success,” Mats Nystrom, an analyst with SEB Enskilda Bank in Sweden, said.

The company’s market capitalization has been trimmed to only $16 billion, a far cry even from Apple’s diminished $423.6 billion that came after its shares plunged more than 12 percent Thursday after issuing a worse-than-expected current quarter forecast.

Separately, the equipment venture with Germany’s Siemens AG (NYSE:SIE) reported its second consecutive quarterly profit and first quarterly sales increase since 2011 largely due to demand for long-term evolution (LTE) network equipment. Nokia Siemens plans to slash costs by €1 billion this year from 2011 levels, the company said.