Nokia’s Lower-Than-Anticipated Earnings in Q1: CEO Optimistic for a Better Second Half

Nokia, a leading provider of wireless and fixed-network equipment headquartered in Espoo, Finland, reported lower-than-anticipated earnings and a significant decline in sales during the first quarter of the year. This was due to market conditions weakened by clients’ lack of investment in 5G technology. Despite this, CEO Pekka Lundmark expressed optimism for a stronger second half of the year and achieving full-year outlook.

The company’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.

Lundmark acknowledged that ongoing weakness in the telecom equipment market is affecting operators’ investments in 5G and other technologies due to economic uncertainty and high financing costs. However, he expressed confidence in achieving better performance in the coming months and reaching full-year goals.

Nokia is one of the major players in the 5G technology space alongside Ericsson, Huawei, and Samsung. Ericsson also reported similar difficulties with a significant sales decline in the first quarter. Despite these challenges, Lundmark highlighted order intake strength and expressed expectations for net sales growth in the Network Infrastructure unit 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.