Nokia posts quarterly profit miss, flags disruption from Trump's tariffs
FILE PHOTO: A view shows Nokia headquarters in Espoo, Finland, October 19, 2023. JUSSI NUKARI/Lehtikuva/via REUTERS/File photo
Nokia reported first-quarter profit well below market expectations on Thursday and flagged a short-term disruption from U.S. tariffs with an estimated impact of between 20 million and 30 million euros to its second-quarter profit.
Comparable operating profit fell to 156 million euros ($176.9 million) in the first quarter of 2025, a 36 per cent miss against the average forecast of 243.83 million euros by analysts surveyed by LSEG.
A one-time charge in its mobile networks division had an impact of 120 million euros on quarterly margins, the company said.
Nokia's sales in North America have been growing steadily despite losing market share to Nordic rival Ericsson, reflecting a renewed market strength after years of weakness.
But now the sweeping tariffs imposed by U.S. President Donald Trump could counter this trend, as companies might pause orders fearing price increases.
Nokia's net sales totalled 4.39 billion euros in the first quarter, down 3 per cent on a constant-currency basis compared to a year earlier and a notch lower than the 4.41 billion euros expected by analysts.
It confirmed its annual outlook, which now includes the acquisition of Infinera, but said achieving the top-end of the range for operating profit would be more challenging than initially expected.
Nokia CEO Justin Hotard, who took the helm in April, said he had not seen a significant shift in demand due to U.S. tariffs, and added that there was an additional opportunity to consider investments in the United States.
"It is not a discussion on (moving) our headquarters ... that is less critical than it is in terms of investment in research and development (R&D) and manufacturing capability," Hotard told Reuters.
Nokia has more than a dozen sites in North America, and it owns the Bell Labs in New Jersey for R&D.
On Thursday, the Finland-based company announced a multi-year extension of its partnership with T-Mobile in the U.S. to expand the carrier's 5G network coverage. Nokia declined to disclose financial details of the deal.
Its shares dropped more than 6 per cent in early Helsinki trading, as weak earnings offset the positive news of the T-Mobile contract extension, J.P.Morgan analysts said in a note to investors.
($1 = 0.8820 euros)
