BARCELONA, SPAIN – FEBRUARY 26: An illuminated logo stands on the Nokia stand at the Mobile World Congress 2024 on February 26, 2024 in Barcelona, Spain. (Photo by Xavi Torrent/Getty Images)
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Earlier in the day, Nokia reported that comparable operating profit fell to 423 million euros ($462 million) in the second quarter, down almost a third from the 619 million euros reported in the same period last year.
The company cited “continued market weakness” and said net sales also fell 18% to 4.47 billion euros – the lowest level since the fourth quarter of 2015, according to data from LSEG.
“The biggest impact came from the challenging year-ago comparison period, when India’s 5G deployment was at its peak and India accounted for three-quarters of the decline,” Nokia CEO Pekka Lundmark said in the press release.
The landscape in the mobile network sector also remains “challenging as operators remain cautious,” he warned.
Nokia nevertheless predicts a “stabilizing” environment in the industry and a “significant acceleration in net sales growth in the second half” of the year, based on last quarter’s order intake.
“Although momentum is improving, the recovery in net sales is coming somewhat later than we previously expected, which is impacting our 2024 net sales assumptions for the business group,” Lundmark said. “Despite this, we remain firmly on track to achieve our full-year outlook, supported by our swift action on costs.”
The company continues to target a result close to or just below the midpoint of its expected full-year comparable operating profit range of EUR2.3 billion to EUR2.9 billion.
Nokia suffered a huge blow late last year when it lost a major North American contract. The American telecom company AT&T chose Ericsson as its supplier for the construction of a telecom network that uses exclusively the so-called ORAN technology.
The Finnish company and Swedish rival Ericsson have embarked on sweeping cost-cutting programs amid an industry-wide battle against a slowing economy and infrastructure spending cuts by mobile operators. In October, Nokia said it would cut up to 14,000 jobs after a fall in third-quarter profit, aiming to reduce gross costs by between €800 million and €1.2 billion by 2026.
The company said on Thursday it had made “significant progress” with its cost-saving program, taking steps to reduce costs by 400 million euros so far.
— CNBC’s Arjun Kharpal contributed to this report.