Nokia, a renowned wireless and fixed-network equipment manufacturer located in Espoo, Finland, reported lower-than-expected profits and a significant decline in sales during the first quarter of the year. The company’s net profit for the January-March period was 501 million euros, up 46% from the previous year but still below analysts’ projections. One-off gains from Nokia’s licensing business contributed to the profit, with sales dropping by 20% to 4.7 billion euros.
CEO Pekka Lundmark acknowledged the market’s weakness in telecom equipment due to clients’ reluctance to invest in 5G technology. However, he expressed confidence that there would be a stronger second half of the year and achieving full-year outlook. Nokia is one of the major players in the 5G technology space alongside Ericsson, Huawei, and Samsung. Ericsson also reported similar market difficulties with a significant sales decline in the first quarter.
Lundmark highlighted that order intake was strong and expected net sales growth in the Network Infrastructure unit for the full year, with a stronger performance in the second half. The mobile network unit was affected by low spending on 5G technology in North America and India during the first quarter. Despite this setback, Lundmark remains optimistic about achieving full-year goals and performing better in future months.
Overall, Nokia faced challenges due to weakening demand for telecom equipment as clients delayed investments in emerging technologies like 5G due to economic uncertainty and high financing costs. Despite these challenges, CEO Pekka Lundmark remained confident about achieving full-year outlooks and improving performance in future months.
