HELSINKI (AFP) – Cost-cutting helped Finnish telecoms equipment maker Nokia yesterday reported a 52-per-cent rise in first-quarter net profit to EUR438 million even though sales plunged nearly 20 per cent.
Nokia posted sales of EUR4.67 billion, down by a fifth from a year ago in a “challenging environment”. It mobile networks activity was hit by operators’ declining investments in North America and India.
The firm announced in October it would cut up to 14,000 jobs out of 86,000 employees due to weakening demand for 5G equipment in the two key markets.
“As expected, the ongoing market weakness drove a 19 per cent year-on-year constant currency decline in net sales in the first quarter”, Nokia Chief Executive Pekka Lundmark said in a statement.
However, Nokia saw “continued improvement in order intake, meaning we remain confident in a stronger second half and achieving our full year outlook”.
Nokia shares were stable in morning trading on the Helsinki stock exchange analyst with Finnish market research firm Inderes Atte Riikola, told AFP Nokia’s sales were a concern however.
“Nokia had expected that the start of the year would be bad, but it was a little bit worse than expected, especially in the mobile networks business”, he said.
Riikola added that a substantial “turnaround in net sales” was required for a market recovery in the second half of 2024, but there were no “clear signs of the market improving” at present.
“On the network infrastructure side there are more concrete signs of improvement but the biggest question mark remains the mobile networks”, he said.
Nokia reported a six-per-cent fall in operating profit to EUR400 million.
