Despite reporting lower-than-expected profits and a significant drop in sales for the first quarter, Nokia, a wireless and fixed-network equipment maker based in Espoo, Finland, expressed confidence in a stronger second half of the year. The company’s CEO, Pekka Lundmark, attributed the decrease in sales to the lack of investment by clients in 5G technology.
Nokia 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.
Lundmark acknowledged that ongoing weakness in the telecom equipment market due to operators cutting back on investments in 5G technology has affected the market overall. Despite these challenges, Lundmark expressed confidence that continued improvement in order intake will support a more robust performance in the second half of the year.
Nokia is a key supplier of 5G technology and faces competition from companies like Ericsson, Huawei, and Samsung. Lundmark highlighted that the mobile network unit was impacted by low spending on 5G technology in North America and India during the first quarter. While sales have decreased significantly compared to last year’s level, Lundmark emphasized that there are opportunities for growth ahead for his company’s Network Infrastructure unit for full-year 2024.
