Nokia reported a 32% drop in Q2 operating profit due to sluggish 5G equipment demand, yet expects improvement later.
Operating profit dropped to 423 million euros ($462.38 million), down from 619 million euros a year prior.
Nokia and Ericsson face reduced telecom equipment sales, prompting layoffs of thousands in their respective companies.
Nokia reported an 18% drop in net sales due to reduced 5G investments in India, which constituted 12.5% of 2023 sales, following rapid growth the previous year.
“The most significant impact was the challenging year-ago comparison period which saw the peak of India’s rapid 5G deployment with India accounting for three quarters of the decline,” Nokia said.
However, it expects to see a return to growth in the second half.
While the dynamic is improving, the net sales recovery is happening somewhat later than we previously expected,” CEO Pekka Lundmark said.
“Looking forward, we believe the industry is stabilizing and given the order intake seen in recent quarters we expect a significant acceleration in net sales growth in the second half,” he stated.
Rival Ericsson forecasted a market recovery last week, citing increased demand across North America.
On a conference call with reporters, Lundmark said Nokia was seeing similar early signals of improved demand in North America.
“The fiber market in North America is showing promising signs. We signed new important deals there,” he said.
The company maintained its full-year target for comparable operating profit of 2.3 billion to 2.9 billion euros.
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