Nokia reports profit in Q1, miss revenue estimates due to Covid-19 pandemic

The Finnish company is trying to strengthen its 5G slate and looking especially to deployment by US telecom companies for growth

Nokia Oyj on Thursday reported a 2% fall in first-quarter revenue that missed analysts' estimates, as the company took a hit of about 200 million euros to its topline largely because the Covid-19 pandemic disrupted supply in China. It, however, eked out a small profit backed by good demand for its new 5G telecoms equipment.

The Finnish company, battling with China's Huawei and Sweden's Ericsson, is trying to strengthen its 5G slate and looking especially to deployment by US telecom companies for growth.

Nokia reported January-March revenues of 4.9 billion euros ($5.33 billion), missing the 5.1 billion euro consensus figure, according to Refinitiv data.

Its rivals, Ericsson and Huawei, have posted growth in revenue in the first quarter of the year, helped by strong demand as telecom services help to keep businesses working remotely during the pandemic.

Nokia, which has been trying to reduce product costs and delays in shipment, said product cost reductions were proceeding well and there was an increase in shipment of its new 5G ReefShark equipment.

Nokia generated first quarter underlying profit of 1 cent per share, beating analysts forecast for breakeven, and a loss of 2 cents per share in the same period last year.

The company also lowered its full-year earnings to 23 euro cents from 25 euro cents. Analysts had expected 24 euro cents.

"We did not see a decline in demand in the first quarter. As the COVID-19 situation develops, however, an increase in supply and delivery challenges in a number of countries is possible and some customers may re-assess their spending plans," said Chief Executive Officer Rajeev Suri in a statement.
 

In India, Nokia Oyj recently signed a multi-year deal with Bharti Airtel to deploy network solutions across Airtel’s nine operating circles in India. According to industry analysts, the deal could be worth $1 billion.

Nokia said the deal includes Nokia's Single Radio Access Network solution, AirScale Radio Access, Baseband, and related Services.

The rollout, which will also lay the foundation for providing 5G connectivity in the future, will see approximately 300,000 radio units deployed across several spectrum bands, including 900 Mhz, 1800 Mhz, 2100 Mhz and 2300 Mhz, and is expected to be completed by 2022.