The Finnish telecom equipment giant Nokia announced Thursday that it sees signs of a slowdown in its markets, after a first quarter marked by rising profits but below expectations.
“We are starting to see signs of the impact of the economic environment on our customers’ investments,” said boss Pekka Lundmark in the quarterly report of the group specializing in mobile telecom networks.
‘Because of the investment needs in 5G and fibre, we see it mainly as a timing issue. Nevertheless, we will maintain our discipline on our costs to navigate successfully through this uncertainty,” said the boss of Nokia.
In the first quarter, the group’s net profit increased by 32%, to 289 million euros (284 million francs at the current rate), according to the financial report of the Finnish group, competitor of Chinese Huawei and Swedish Ericsson.
But on a like-for-like basis, it was down 14% and below expectations. Adjusted earnings per share (EPS) were 6 euro cents, versus 7 expected by analysts according to Factset.
The turnover shows him an increase of 10%, above expectations, to around 5.9 billion euros.
The group maintained its forecast at constant exchange rates, but revised its annual revenue forecast downwards with current exchange rates, to a new range of 24.6 to 26.2 billion euros.
In its annual results in January, Nokia said it forecast “robust” demand in 2023, in the midst of a battle with its competitors to install 5G networks around the world, while its competitor Ericsson was less optimistic.
The group, which bought the Franco-American Alcatel-Lucent in 2015, depends mainly on the volume of investment from mobile operators to modernize and improve their networks.
On Tuesday, Ericsson announced the strengthening of a major savings plan which has already resulted in 8,500 job cuts, providing for a “turbulent environment” this year after a mixed first quarter.
The two European groups have long suffered from the emergence of Huawei on their markets, but have benefited for several years from the restrictive measures taken against the Chinese giant by several Western countries, the United States in the lead.
/ATS
