Nokia, a leading wireless and fixed-network equipment manufacturer, recently announced their first-quarter financial results which showed a smaller profit than expected and a significant decrease in sales. The company reported a net profit of 501 million euros in the January-March period, which was below analysts’ expectations. Furthermore, revenue from sales fell by 20% to 4.7 billion euros.
The CEO of Nokia, Pekka Lundmark, attributed the decline in sales to several factors including ongoing weakness in the telecom equipment market and lack of investment in 5G technology by clients. Despite these challenges, Lundmark expressed confidence that the company would improve its performance in the second half of the year and reaffirmed its full-year outlook.
Nokia’s largest business segment by sales is Network Infrastructure, which is expected to return to growth for full year 2024 due to stronger performance in the second half. However, Nokia’s mobile network unit experienced a decline in spending on 5G technology in North America and India during the first quarter which impacted its performance. Nevertheless, Lundmark emphasized that the company’s focus on improving order intake and achieving a turnaround in sales growth for the remainder of the year is critical for success.
Lundmark highlighted that despite facing similar challenges as their Nordic rival Ericsson who also reported a drop in sales during the first quarter due to lack of investment in 5G technology by clients, he expressed optimism about future growth opportunities with emerging markets such as China and India providing new opportunities for expansion.
Overall, while Nokia faced challenges during this quarter due to economic uncertainty and high financing costs among operators who are hesitant to invest in new technologies like 5G, Lundmark remained confident about future growth prospects for his company through strategic investments and partnerships with emerging markets.