Nokia, a leading provider of wireless and fixed-network equipment, recently announced its first-quarter financial results, revealing a smaller profit than anticipated and a significant decrease in sales due to clients’ lack of investment in 5G technology. In the January-March period, the company recorded a net profit of 501 million euros, which was below analysts’ expectations. Additionally, revenue from sales fell by 20% to 4.7 billion euros.
Despite the challenges faced by the telecom equipment market, where operators are hesitant to invest in 5G and other technologies due to economic uncertainty and high financing costs, Nokia CEO Pekka Lundmark expressed confidence in a stronger performance in the second half of the year. He reaffirmed the company’s full-year outlook while emphasizing that their Network Infrastructure unit is expected to return to growth for the full year 2024.
Nokia has been hit with similar challenges as its Nordic rival Ericsson, who also reported a decline in sales during the first quarter. However, Lundmark pointed out that despite this setback, his company’s focus on improving order intake and achieving a turnaround in sales growth for the remainder of the year remains strong.
The mobile network unit, which is Nokia’s second-largest business division, experienced a decline in spending on 5G technology in North America and India during the first quarter. Despite this challenge, Lundmark highlighted that Nokia is determined to continue innovating and investing in emerging technologies such as 5G while remaining committed to delivering value for its customers.
In conclusion, Nokia faced significant challenges during its first quarter due to clients’ lack of investment in 5G technology. However, with continued focus on improving order intake and achieving growth for the remainder of the year, Nokia remains confident about its ability to overcome these obstacles and deliver value for its shareholders.
