Nokia, a wireless and fixed-network equipment maker based in Espoo, Finland, reported lower-than-expected profits and a significant drop in sales for the first quarter. The decrease in sales was attributed to the lack of investment by clients in 5G technology, which affected the market overall.
The company reported a net profit of 501 million euros, which was up 46% from the previous year but still below analyst expectations. One-off gains from Nokia’s licensing business contributed to the profit. Sales were down 20% at 4.7 billion euros for the January-March period.
Nokia’s CEO, Pekka Lundmark, acknowledged the ongoing weakness in the telecom equipment market due to operators cutting back on investments in 5G technology. Despite these challenges, Lundmark expressed confidence in a stronger second half of the year and achieving their full-year outlook.
Nokia is a key supplier of 5G technology, facing competition from companies like Ericsson, Huawei, and Samsung. Lundmark highlighted that the mobile network unit was impacted by low spending in 5G technology in North America and India during the first quarter.
While the economic environment remains uncertain, Nokia anticipates growth in its Network Infrastructure unit for the full year of 2024. Lundmark emphasized the importance of continued improvement in order intake to support a more robust performance in the second half of the year.