Nokia, a leading provider of wireless and fixed network equipment based 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 period January-March was 501 million euros, which is 46% higher compared to the previous year, but still below analysts’ expectations. One-off gains from Nokia’s licensing business weighed on profits, with sales falling 20% to 4.7 billion euros.
Pekka Lundmark, CEO of Nokia, acknowledged the ongoing weakness in the telecommunications equipment market due to a lack of customer investment in 5G technology. Despite this, Lundmark expressed confidence in a stronger second half of the year and achieving the company’s full-year targets. The company is one of the major players in the 5G technology space alongside Ericsson, Huawei and Samsung.
Lundmark highlighted that despite low spending on 5G technology in North America and India during the first quarter, he remains optimistic about better performance in coming months. He also expressed expectations for net sales growth in the network infrastructure unit for the full year with a stronger performance in the second half. On the other hand, Nokia’s mobile network unit was hit hard by low spending on 5G technology during this period. However, Lundmark believes that better performance can be achieved by operators reducing their financing costs and investing more heavily in new technologies such as 5G networks.
In addition to Nokia, Ericsson also reported similar difficulties with a significant drop in sales during this period due to weakened market conditions caused by economic uncertainty and high financing costs. This trend has affected many companies operating within this sector.
Overall, it seems that there are challenges facing companies involved in telecommunications equipment manufacturing due to weakened market conditions caused by economic uncertainty and high financing costs. However, some companies such as Nokia remain optimistic about achieving their full-year targets while others like Ericsson may continue to struggle with declining sales figures.