Nokia Reported Profits Drop in 1Q25

Nokia reported that its first-quarter net sales declined 1% to €4.4 billion. Its Technologies division net sales slipped 51% to €369 million, while there were positives in other areas of the business.

Net sales from Network Infrastructure grew 20% to €1.7 billion, with all units contributing to growth, and its backlog increased. Cloud and Network Services delivered 4% sales growth, due to strong demand for its 5G core and deals with the likes of T-Mobile US, Ooredoo Qatar, and Telefonica. Sales from Mobile Networks increased 3% to €1.7 billion. However, while sales increased, an unexpected one-time contract settlement meant it took a €120 million profitability hit from the unit. This contributed to an overall profitability drop of 74% to €156 million, from €600 million in 1Q24.

Nokia’s new CEO, Justin Hotard, cautioned of short-term disruption resulting from the global tariff situation, with operating profits set to take a further hit in the second quarter. In Hotard’s first earnings announcement since taking the role on 1 April, he said the company was expecting a €20 million to €30 million impact on its comparable operating profit in Q2 from current tariffs. Hotard explained Nokia was not immune to the rapidly evolving global trade landscape, but backed its markets to prove resilient.

“Given the lack of visibility, we have not taken an assumption related to tariffs in the second half of 2025,” he added. He also said the company could continue to utilize the flexibility of the company’s global manufacturing network to minimize the impact of the evolving tariff landscape. Hotard added he would absolutely entertain increasing Nokia’s US manufacturing to mitigate the impact of the tariffs. The company notably already has five manufacturing facilities in the US, including two semiconductor factories.

In the US, Nokia received a boost as it announced a significant multi-year extension to its partnership with T-Mobile US. The Finnish vendor said it would provide enhanced 5G connectivity for T-Mobile’s network, deploying next-generation baseband and radio technologies. Under the agreement, Nokia added that it would provide RAN gear and deploy AI-powered offerings to the US operator, covering hardware, software, maintenance, and support services.