In the first quarter of 2021, Nokia, a leading wireless and fixed-network equipment manufacturer based in Espoo, Finland, reported lower-than-expected profit and a significant double-digit decline in sales. This was primarily due to market weakness resulting from clients’ lack of investment in 5G technology. Despite this, CEO Pekka Lundmark expressed confidence in a stronger second half of the year and achieving the full-year outlook.
Nokia’s net profit for the January-March period was 501 million euros, up 46% from the previous year but still below analysts’ expectations. One-off gains from Nokia’s licensing business contributed to the profit, with sales dropping by 20% to 4.7 billion euros. The company is a major player in the 5G technology space along with Ericsson, Huawei, and Samsung.
Lundmark acknowledged that ongoing weakness in the telecom equipment market was causing operators to cut back on investments in 5G and other technologies due to economic uncertainty and high financing costs. However, he remained optimistic about a better performance in the coming months and achieving the company’s full-year goals.
The Network Infrastructure unit of Nokia showed order intake strength and is expected to achieve net sales growth for the full year. The mobile network unit was affected by low spending on 5G technology in North America and India during the first quarter. Despite this, Lundmark remains optimistic about a better performance in these regions as well as others during the second half of the year.