Nokia Reports Decline in Q2 Profits Amid Weak 5G Market

Nokia has announced a significant decline in profit and sales for the second quarter, attributing the drop to a weak market and cautious investments in 5G technology. The Finnish company reported a 20% fall in net profit and an 18% decrease in sales, paralleling challenges faced by its competitors due to economic uncertainty.

Nokia, the wireless and fixed-network equipment manufacturer, has reported a substantial double-digit decline in profit and sales for the second quarter, citing ongoing market weakness as the primary reason. Customers are hesitating to invest in 5G technology, which has impacted the company's financial performance.

Headquartered in Espoo, Finland, the company revealed a net profit of 328 million euros (USD 359 million) for the April-June period, down 20% from 409 million euros (USD 447 million) a year previous. Net income attributable to shareholders also fell from 410 million euros to 325 million euros (USD 355 million).

Mirroring its Nordic competitor Ericsson, Nokia has been affected over the past year by telecom operators reducing investments in 5G technology and other telecom infrastructures due to economic instability and high financing costs.

CEO Pekka Lundmark commented on the challenging second quarter, explaining that net sales dropped by 18% year-on-year in constant currency. Sales fell to 4.5 billion euros (USD 4.9 billion) from 5.4 billion euros (USD 5.9 billion) in the same period last year.

Nokia, a leading supplier of 5G technology along with Ericsson, Huawei, and Samsung, remains optimistic about future sales. Lundmark expects a significant sales acceleration in the second half of the year, driven by its network infrastructure business unit.

Lundmark mentioned, however, that the mobile network unit continues to face challenges due to operator caution in committing further investments to 5G technology and equipment.

(With inputs from agencies.)