Finnish telecommunications equipment maker Nokia reported a sharp fall in second-quarter profits on Thursday, dragged down by a drop in investment by North American mobile phone operators.
The company, which is competing with Swedish rival Ericsson and China's Huawei in the global rollout of 5G equipment, said the deployment in India drove growth for its mobile network business.
But net sales fell in North America as clients continue to review their spending and reduce their inventory levels.
Nokia said its net profit fell by 37 percent to EUR 289 million (roughly Rs. 2,653 crore) in the second quarter compared to the same period last year — well below the two billion euros forecast in a Bloomberg survey of analysts.
Net sales reached EUR 5.7 billion (roughly Rs. 52,340.), down three percent, though they were flat on a constant currency basis.
Net sales fell by 42 percent in North America alone while soaring by 333 percent in India. Macroeconomic "uncertainty" weighed on sales of network infrastructure.
"Considering the significant decline in major North American operators' investments, our operating margin has proved resilient," chief executive Pekka Lundmark said in an earnings statement.
Nokia was able to deliver an operating margin of 11 percent "as a result of prudent management of our costs.
Last week, Nokia issued a statement lowering its outlook for the year, warning that high inflation and rising interest rates were increasingly affecting customer spending plans, notably in North America.
Its rival Ericsson reported a rare net quarterly loss as mobile phone operators scale back investment in 5G networks.
"Earlier in the year I highlighted that we were starting to see signs of macroeconomic challenges along with inventory digestion impacting customer spending and this has intensified through the second quarter," Lundmark said.
Will the Nothing Phone 2 serve as the successor to the Phone 1, or will the two co-exist? We discuss the company's recently launched handset and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts. Affiliate links may be automatically generated - see our ethics statement for details.
For details of the latest launches and news from Samsung, Xiaomi, Realme, OnePlus, Oppo and other companies at the Mobile World Congress in Barcelona, visit our MWC 2024 hub.