Nokia Q1 profit slumps 59%

Nokia has reported a sharp 59% decline in net profit for the first quarter of 2018 to €86 million ($104.1 million) due to the ongoing weakness in the telecoms equipment market.

Revenue for the quarter fell 9% year-on-year to €4.93 billion, with networks revenue down 12% to €4.32 billion.

The vendor said sales and profitability for the quarter were primarily impacted by lower net sales in North America, but there were signs of improvement in terms of orders, suggesting that sales and profitability will improve over the rest of the year.

Based on the orders received during the quarter, the company expects demand for 5G to accelerate further, particularly in North America where the first 5G fixed wireless access deployments are expected in the second half of the year.

Licensing revenue for the quarter meanwhile grew 65% year-on-year, and the company expects further smartphone licensing opportunities in China, as well as brand licensing and in the automotive sector.

“We see strong momentum building for the full year despite a slow start in networks. I have considerable confidence that Nokia is well-positioned to out-perform a strengthening networks market and meet our full-year 2018 guidance,” Nokia CEO Rajeev Suri said.

These targets include an earnings per share of €0.23 to €0.27, with an operating margin of between 9% and 11%.