Nokia CEO Pekka Lundmark pointed to continued challenges for its Mobile Network division during Q2 which contributed to an 18 per cent year-on-year drop in sales across the business, though he cited positive trends elsewhere and reiterated predictions of a H2 revival.

In its financial results statement, the executive attributed the decline in Nokia’s sales to €4.5 billion as being partly due to Q2 2023 being the peak of 5G spend in India, making for a tough comparison.

He did, though, also indicate mobile operators remained cautious with their spending in the recent quarter, taking a toll on its Mobile Networks division.

On a more positive note for the unit, Lundmark added there had been “significant customer tendering activity” so far in 2024, with Nokia winning a number of deals. It also gained €150 million related to a contract resolution with US operator AT&T, which signed a big money open RAN deal with rival Ericsson late in 2023.   

He said the conclusion of negotiations with AT&T over its existing RAN agreements “gives us clarity on the path forward and ensures that we maintain the value agreed in the contracts”.

Expectations
Elsewhere, Lundmark highlighted improved order intake trends, especially in its fixed-focussed Network Infrastructure division, with an expectation of a “meaningful improvement in net sales” across the whole of Nokia in H2.  

“While the dynamic is improving, the net sales recovery is happening somewhat later than we previously expected, impacting our business group net sales assumptions for 2024. Despite this, we remain solidly on track to achieve our full year outlook supported by our quick action on cost”.

Nokia is currently in the process of cutting overheads and reported it had already “actioned” €400 million out of a previously announced target of reducing costs by between €800 million and €1.2 billion by end-2026.  

The vendor’s comparable net profit was down 20 per cent to €328 million, with figures adjusted to take into account the pending sale of its submarine cable business and the division’s reallocation on Nokia’s books, an associated impairment and other one-off items.