Finnish telecom equipment maker Nokia said today that its operating profit fell 32% in the second quarter because of continued weak demand for 5G telecom equipment but forecast a demand improvement in the second half.
Its comparable operating profit fell to €423m from €619m in the same quarter a year earlier.
Nokia and its Swedish rival Ericsson have been hit by customers buying less telecom equipment, and have announced thousands of lay-offs in response.
Nokia said its net sales fell 18% year-on-year in constant currency, largely because the pace of investment in 5G technology in India - which accounted for about 12.5% of total 2023 sales - was slowing after rapid growth a year before.
"The most significant impact was the challenging year-ago comparison period which saw the peak of India's rapid 5G deployment with India accounting for three quarters of the decline," Nokia said.
It however forecast a return to growth in the second half.
"While the dynamic is improving, the net sales recovery is happening somewhat later than we previously expected," CEO Pekka Lundmark said.
"Looking forward, we believe the industry is stabilising and given the order intake seen in recent quarters we expect a significant acceleration in net sales growth in the second half," he added.
Rival Ericsson last week also forecast a recovery in the market as demand was picking-up in North America.
On a call with reporters, Lundmark said Nokia was seeing similar early signs of improving demand in North America.
"The fiber market in North America is showing promising signs. We signed new important deals there," he said.
The company kept its full-year guidance for comparable operating profit of between €2.3 billion and €2.9 billion.
