Finnish telecoms equipment maker Nokia reported a profit miss in the first quarter of 2021, but expressed confidence in a stronger second half of the year. The company’s rival, Ericsson, had also recently forecasted a stronger second half, indicating positive momentum in the industry.
Nokia’s first-quarter profit came in below expectations, with net profit falling to 263 million euros from 317 million euros a year earlier. Revenue also declined by 3% to 5.08 billion euros. The company attributed the lower-than-expected results to supply chain challenges and the impact of the COVID-19 pandemic on its business.
Despite the disappointing first-quarter results, Nokia remains optimistic about the future. The company’s CEO, Pekka Lundmark, stated that Nokia is on track to deliver on its full-year guidance and expects a stronger second half of the year. He pointed to the company’s strong product portfolio and continued investment in research and development as reasons for optimism.
Nokia’s outlook aligns with that of its competitor, Ericsson, which recently reported better-than-expected first-quarter results and forecasted a stronger second half of the year. Ericsson’s CEO, Börje Ekholm, cited increased demand for 5G equipment and services as a key driver of growth.
The positive outlook from both Nokia and Ericsson is a good sign for the telecoms industry as a whole. The rollout of 5G networks is expected to drive demand for telecoms equipment and services in the coming years, and both companies are well-positioned to benefit from this trend.
Investors reacted positively to Nokia’s forecast, with the company’s shares rising by more than 4% following the earnings report. Analysts also expressed confidence in Nokia’s ability to deliver on its full-year guidance and capitalize on the growing demand for 5G technology.
In conclusion, while Nokia may have missed profit expectations in the first quarter, the company remains optimistic about its prospects for the rest of the year. With strong demand for 5G equipment and services driving growth in the industry, Nokia and Ericsson are well-positioned to capitalize on this trend and deliver strong results in the coming months.