In the first quarter of the year, Nokia, a leading provider of wireless and fixed-network equipment, reported lower-than-expected profit and a significant double-digit decline in sales. This was due to a weakened market caused by clients’ lack of investment in 5G technology. Despite this, CEO Pekka Lundmark expressed confidence in achieving the full-year outlook, citing one-off gains from Nokia’s licensing business that contributed to the profit.
Nokia’s net profit for the January-March period was 501 million euros, up 46% from the previous year but still below analysts’ expectations. The company’s sales dropped by 20% to 4.7 billion euros due to a market weakened by operators cutting back on investments in 5G and other technologies due to economic uncertainty and high financing costs.
Lundmark highlighted the order intake strength and expressed expectations for net sales growth in the Network Infrastructure unit for the full year, with a stronger performance in the second half. However, the mobile network unit was affected by low spending on 5G technology in North America and India during the first quarter. Despite this, Lundmark remains optimistic about achieving better performance in the coming months and meeting Nokia’s full-year goals.
Nokia is one of several major players in the 5G technology space along with Ericsson, Huawei, and Samsung. Ericsson also reported similar market difficulties with a significant sales decline in the first quarter due to clients cutting back on investments in 5G technology.