Nokia continued to face hurdles in the second quarter, with an 18% year-on-year drop in revenues to €4.46bn and an 8% decrease in operating profit to €432m, but the vendor remains bullish that the second half of the year will deliver positives in terms of improved network infrastructure sales.
Reflecting on the results, Nokia CEO Pekka Lundmark explained that the company’s second-quarter revenues struggled to live up to last year’s strong results for the same period, which benefitted from a peak in 5G deployments in India.
Unsurprisingly, the ongoing overall market weakness also contributed to the vendor’s weaker performance. Similar pains were felt by its major rival Ericsson, which booked a 7% year-on-year decline in revenues to 59.8bn Swedish krona ($5.7bn) – see No let up in Ericsson’s annus horribilis.
Nokia’s Mobile Networks division took the biggest hit, with net sales declining 25% year on year to €1.97bn. According to Lundmark, even though “the market dynamic remains challenging as operators continue to be cautious”, the Finnish vendor has seen “significant customer tendering activity”, which has helped it to secure several deals so far this year, including with its new customer Meo (Altice’s brand in Portugal) and finalise negotiations with US telco giant AT&T for existing radio access network (RAN) contracts. “This gives us clarity on the path forward and ensures that we maintain the value agreed in the contracts,” Nokia’s chief stated.
In fact, the vendor's Mobile Networks unit benefitted from €150m thanks to a "contract resolution" with AT&T, which last year signed a massive deal with Ericsson for Open RAN developments.
