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Finnish telecom equipment maker Nokia said on Thursday its second-quarter operating profit fell 32% due to continued weak demand for 5G telecom equipment, but forecast demand to improve in the second half of the year.
Its comparable operating profit fell to 423 million euros ($462.38 million) from 619 million euros in the same period last year.
Nokia and its Swedish rival Ericsson have been hit by customers cutting back on telecoms equipment and have announced thousands of new Layoffs In response.
Nokia said its net sales fell 18% year-on-year at constant exchange rates, mainly because the pace of investment in 5G technology in India slowed after rapid growth in the previous year (India’s 5G technology accounted for about 12.5% of total sales in 2023).
“The most significant impact was during the challenging year-on-year period, when 5G deployments in India were peaking, but fell by three quarters,” Nokia said.
However, the agency predicts growth will resume in the second half of the year.
“While the situation is improving, the recovery in net sales is occurring somewhat later than we had previously expected,” Chief Executive Officer Pekka Lundmark said.
He added: “Looking ahead, we believe the industry is stabilizing and given the order intake in recent quarters, we expect net sales growth to accelerate significantly in the second half of the year.”
Competitors Ericsson Last week, it was also predicted that the market would recover as demand in North America was picking up.
In a conference call with reporters, Lundmark said Nokia was seeing similar early signs of improving demand in North America.
“The North American fiber market is showing positive signs. We have signed new important agreements there,” he said.
The company maintained its full-year comparable operating profit forecast of between 2.3 billion euros and 2.9 billion euros.
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