Nokia Sees 29% Drop in Second-Quarter Net Profit

Nokia reported a 29% decline in its second-quarter comparable net profit as macroeconomic uncertainty impacted sales in its network-infrastructure business. At the same time, North American customers continued to assess overall spending and reduce inventories in mobile networks.

Sales Outlook for Second Half

Looking ahead, Nokia anticipates second-half sales to be similar to the first half in both network infrastructure and mobile networks, with some sequential improvement expected in the fourth quarter.

Lowered Full-Year Guidance

The company recently revised its full-year net sales guidance and narrowed its operating margin outlook due to weaker demand in network infrastructure and mobile networks. This slowdown can be attributed to a challenging macroeconomic environment and the need for customers to manage their existing inventory.

5G Investment Opportunities

Despite the challenges, Nokia’s CEO, Pekka Lundmark, highlighted the significant global need for operators to invest in 5G networks. He emphasized that only around 25% of the potential mid-band 5G base stations have been deployed outside of China. Lundmark is determined to improve the company’s operating margin to double digits.

Financial Performance

In the second quarter, comparable net profit dropped to €415 million ($464.9 million) from €582 million the previous year. Sales also declined by 2.8% to €5.71 billion.

Analysts had expected comparable net profit of €408 million, while Nokia had guided for sales of €5.7 billion.

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