By Tarmo Virki, European technology correspondent
HELSINKI (Reuters) - Shares in Nokia jumped on Tuesday after the Wall Street Journal reported the world's top cellphone maker has sent out headhunters to find a replacement for Chief Executive Olli-Pekka Kallasvuo.
Kallasvuo, who has spent more than half of his life at Nokia, has struggled to keep up with nimbler rivals Apple Inc and Google Inc.
Kallasvuo may be ousted as early as the end of July, the newspaper cited a person familiar with the matter as saying. The firm has been rocked by a profit-warning and management shakeup this spring alone.
"There is a spark of hope that changes are coming, not only personnel changes, but also strategic changes," said Sami Sarkamies, analyst at Nordea in Helsinki.
Shares in Nokia were 4.2 percent higher at 7.05 euros at 0911 GMT, outperforming 0.3 percent firmer European technology shares index.
Nokia declined to comment, citing company policy regarding market rumors.
Analysts say Nokia has been slow to innovate amid an explosion of feature-rich multimedia gadgets like the Apple iPhone and devices based on Google's Android operating system.
Kallasvuo, a former company lawyer and chief financial officer, has come under attack from shareholders this year as the firm's stock price tanked. Shares in Nokia have wallowed at levels last seen in 1998.
The firm will be one of the few to miss profit growth in 2010, the year of economic recovery, and software problems continue to haunt its smartphone lineup.
Analysts say Nokia's market share position could weaken further in coming months.
"Kallasvuo is a bad communicator in a world where his competitors are Steve Jobs, Eric Schmidt and Steve Ballmer," said John Strand, founder and chief executive of telecoms consultancy Strand Consult.
"He is good at selling phones, but bad at selling the Nokia story," Strand said.
Kallasvuo's total pay leapt 32 percent in 2009, a tough year for the shareholders when the company's share price slid 20 percent.
Nokia's revenues fell 19 percent last year, while operating profit dropped 76 percent. The value of company's brand -- one of its key assets -- dropped 58 percent in just one year, according to a global study by Millward Brown.
And things do not seem to be improving.
Nokia warned last month its second-quarter sales and profits at its key phones unit would come in weaker than expected -- the company's second profit warning in less than two months.
Nokia is expected to post a 27 percent fall in second-quarter underlying earnings per share when its reports on Thursday, July 22.
(Reporting by Tarmo Virki and Terhi Kinnunen in Helsinki, Phil Wahba in Los Angeles; Editing by Samia Nakhoul and Hans Peters)