TECH

Nokia reports modest profit from supply disruption

Nokia Oyj made a small profit in the first quarter, supported by demand for its new high-margin 5G network equipment and forecast a strong second half of the year.
The Finnish company said that most of the impact of the coronavirus will be felt in the current quarter. Its revenue fell 2% from January to March, to around 200 million euros, partly because the pandemic interrupted the supply of operations in China.
Nokia, in a dispute with Huawei and Ericsson, is trying to strengthen its plans for 5G networks and is looking especially for deployment in US telecommunications companies looking for growth.
Nokia expects a seasonally strong second half, when it will have new leadership, as former executive Pekka Lundmark of the energy group Fortum is expected to replace current chief executive Rajeev Suri in September.
The company reduced its profit forecast for the year, from 0.25 euros to 0.23 euros per share.
Nokia reported that revenues from January to March fell to 4.9 billion euros, below the consensus of 5.1 billion euros, according to data from Refinitiv.
"We did not see a decline in demand in the first quarter. As the Covid-19 situation develops, it is possible to increase supply and delivery challenges in several countries and some customers may reevaluate spending plans," said Suri.
Nokia generated underlying earnings in the first quarter of 0.01 euros per share, in line with analysts' forecasts, according to data from Refinitiv. The company posted a loss of 0.02 euros per share in the same period last year.
The company, which cut dividends after a profit warning in October, is trying to deal with shipping costs and delays and has pointed to progress for its new 5G ReefShark network equipment. 

by Tarmo Virki and Supantha Mukherjee