Nokia reports smaller-than-expected profits, significant sales decline in Q1 due to lack of 5G investments.

Nokia, a leading manufacturer of wireless and fixed-network equipment, has released its first-quarter financial results showing a smaller-than-expected profit and a significant double-digit decline in sales. The drop in sales is attributed to a market that has been weakened by clients who are not investing in 5G technology.

The company, based in Espoo, Finland, reported a net profit of 501 million euros for the January-March period, an increase of 46% from the previous year but below analysts’ expectations. One-off gains from Nokia’s licensing business contributed to the profit, while net income attributable to shareholders stood at 497 million euros, up from 332 million euros a year earlier. Sales were down 20% at 4.7 billion euros.

Nokia’s CEO Pekka Lundmark acknowledged the ongoing weakness in the telecom equipment market, driven by operators cutting back on investments in 5G and other technology due to economic uncertainty and high financing costs. Despite this, Lundmark expressed confidence in achieving the company’s full-year outlook, citing continued improvement in order intake.

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. Lundmark expressed optimism regarding the outlook for Network Infrastructure, projecting a return to net sales growth in the second half of 2024. The mobile network unit, Nokia’s second-largest business entity