Nokia's quarterly profit lower than expected

A fall in demand for 5G equipment in North America, the largest market for Nokia and rival Ericsson, and market share losses in China have forced both to temper expectations and lay off thousands of employees to shedcosts.

The Finnish group posted a first-quarter operating profit, excluding certain items of income and expenses, and helped by cost cuts, of €597m, up from €479m a year earlier, as constant-currency sales fell 19%.CEO Pekka Lundmark said an improvement in order intake seen late last year continued in the first quarter despite a persistent challenging business environment.

"While we are conscious of the broader economic environment, considering the ongoing order intake strength, we expect Network Infrastructure will return to net sales growth for full year 2024 with a stronger second half performance," he said.For the Mobile Networks division, which saw local-currency sales tumble 37%, he said Nokia expects demand to pick up the rest of the year.

Nokia in January forecast a demand recovery in the second half of 2024. Ericsson on Tuesday said its sales would normalise in the second half. Nokia today repeated an outlook given in January for a comparable operating profit in 2024 of €2.3-2.9 billion.Nokia's comparable gross margin widened to 48.6% from 37.7%.

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