Nokia, a global leader in wireless and fixed-network equipment, has released its first-quarter financial results. Despite expectations of a larger profit, the company reported a smaller-than-anticipated net profit of 501 million euros for the January-March period. This represents an increase of 46% from the previous year but falls short of analysts’ predictions.
Sales were down by 20% to 4.7 billion euros, with one-off gains from Nokia’s licensing business contributing to the profit. Net income attributable to shareholders stood at 497 million euros, up from 332 million euros a year earlier.
The decline in sales can be attributed to a market that has been weakened by clients who are not investing in 5G technology. As one of the leading suppliers of 5G technology globally, alongside Ericsson, Huawei, and Samsung, Nokia faces challenges in regions like North America and India where spending on 5G technology has been low.
Despite this challenge, Nokia’s CEO Pekka Lundmark expressed optimism regarding the outlook for Network Infrastructure and projected a return to net sales growth in the second half of 2024. The mobile network unit was particularly impacted by the low levels of spending in 5G technology during the first quarter. However, Lundmark acknowledged the ongoing weakness in the telecom equipment market due to economic uncertainty and high financing costs that have driven operators to cut back on investments in new technologies.