Written By Nokia, the Finnish telecommunications company, has reported disappointing financial results for the first quarter of 2023, falling short of market estimates. The company has attributed the poor performance to decreased customer spending, particularly in the North American and European markets.
In the first three months of the year, Nokia recorded net sales of €4.9 billion ($5.7 billion), a decline of 6% compared to the same period in the previous year. Operating profit was €122 million ($142 million), down from €305 million ($354 million) in Q1 2022. Nokia also reported a loss of €158 million ($183 million) for the quarter, compared to a profit of €81 million ($94 million) in Q1 2022.
Nokia’s Chief Executive Officer, Pekka Lundmark, attributed the company’s poor performance to “lower customer spend, especially in North America and Europe.” He added that “the market remains challenging, and we need to continue to adapt to the changing landscape.”
The company’s Networks business, which sells telecommunications equipment and services to operators, was particularly affected by the decline in customer spending. Net sales for the Networks division fell by 7% to €3.8 billion ($4.4 billion), while operating profit was down to €55 million ($64 million) from €254 million ($295 million) in the same period last year.
Nokia’s other business units, including Nokia Technologies and Nokia Software, also recorded a decline in net sales compared to Q1 2022. However, the company’s digital health business, Withings, saw a 6% increase in net sales, reflecting the growing demand for digital health products and services.
Despite the disappointing results, Nokia remains optimistic about its future prospects. The company expects to benefit from the ongoing rollout of 5G networks around the world, which is expected to drive demand for its telecommunications equipment and services. Nokia is also investing in the development of new technologies, such as artificial intelligence and the Internet of Things, which could help to drive future growth.
In a statement, Lundmark said that “despite the challenges we faced in the first quarter, Nokia remains well-positioned for the future. We are confident that our ongoing efforts to transform the company and develop new technologies will enable us to capture the opportunities ahead.”
Nokia’s stock price fell by around 5% following the announcement of the Q1 results. However, some analysts remain optimistic about the company’s prospects. Mikael Rautanen, an analyst at Inderes, said that “Nokia’s long-term growth outlook is still intact, and the company is well-positioned to benefit from the ongoing digital transformation.”
