Nokia CEO Pekka Lundmark cited low levels of spending in North America and India as contributing to a slump in Q1 sales for its mobile networks division, though the vendor expects the market to pick up later in the year.
In its financial statement, the executive predicted the quarter was a low point in demand for the unit, with activity forecast to improve “progressively” in the remainder of 2024.
Nokia recorded a 39 per cent year-on-year decline in net sales for Mobile Networks to €1.6 billion, with an operating loss of €42 million for the division. In Q1 2023, it made an operating profit of €137 million.
Lundmark added the slower pace of customer spending in India was anticipated following rapid 5G deployments in the market in the first half of 2023.
Across the whole business, the executive pointed to improved order intake in Q1 and an expectation of a stronger second half. He also noted the completion of patent deals in its IP division and a positive outlook for its fixed-focused Network Infrastructure unit.
Lundmark said the company had made rapid progress on operating model changes and associated cost saving measures announced in 2023, with the company on track to make €500 million in savings this year.
“These actions, combined with our expectation for improved net sales growth in the second half of the year, supported by our order backlog, mean we are solidly on track to achieve our full-year comparable operating profit outlook.”
Nokia booked a 20 per cent decline in net sales to €4.7 billion, attributed to ongoing market weakness. Net profit was up 52 per cent to €438 million, with improvements to its margins, cost savings and patent deals contributing.
The post Nokia chief brands Q1 low point for mobile network demand appeared first on Mobile World Live.
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