Nokia, a global leader in wireless and fixed-network equipment manufacturing, reported its first-quarter financial results showing a smaller-than-expected profit and a significant double-digit decline in sales. This drop in sales is attributed to the ongoing weakness of the telecom equipment market, driven by operators cutting back on investments in 5G technology due to economic uncertainty and high financing costs.
Despite this challenge, Nokia’s CEO Pekka Lundmark expressed confidence in achieving the company’s full-year outlook, citing continued improvement in order intake. As one of the leading suppliers of 5G technology globally, alongside Ericsson, Huawei, and Samsung, Nokia faces challenges in regions like North America and India where spending on 5G technology has been low.
During the January-March period, Nokia reported a net profit of 501 million euros, an increase of 46% from the previous year but below analysts’ expectations. One-off gains from Nokia’s licensing business contributed to the profit, while net income attributable to shareholders stood at 497 million euros, up from 332 million euros a year earlier. Sales were down 20% at 4.7 billion euros.
Nokia’s mobile network unit was particularly impacted by the low levels of spending on 5G technology during the first quarter. However, Lundmark expressed optimism regarding the outlook for Network Infrastructure and projected a return to net sales growth in the second half of 2024.