Por Supantha Mukherjee
STOCKHOLM (Reuters) – Telecoms equipment maker Nokia reported stronger-than-expected quarterly results on Thursday, supported by demand for 5G equipment despite supply chain constraints and higher component prices.
The Finnish company has been gaining ground against rivals such as Sweden’s Ericsson and China’s Huawei after it made its products more competitive by investing heavily in research and finding ways to cut costs elsewhere.
But a global shortage of chips and new lockdowns in China have also put pressure on supply chains, also pushing up prices for parts used in manufacturing.
“We’re engaging with our customers now to see how much of that can be passed on to customer prices,” he said.
Since taking the helm of the company in 2020, Lundmark has focused on reducing costs and making changes to recover the company from past mistakes that hit 5G ambitions.
While Nokia sees greater demand from the Americas, Europe and parts of Asia, countries like India – which is expected to be a big driver of 5G demand – have yet to begin a full-scale rollout.
Nokia’s comparable operating profit in the first quarter rose to €583 million from €551 million, beating the average forecast of €513 million from analysts polled by Refinitiv.
Network infrastructure grew 9% in constant currency, driven by strong demand in fixed and subsea networks.
Net sales grew by 5% to €5.35 billion, beating estimates of €5.26 billion. The company reaffirmed its outlook for net sales for the year of between 22.9 billion and 24.1 billion euros in constant currency.
Earlier this month, Nokia announced a withdrawal from Russia that would trigger a provision of 100 million euros, but maintained its outlook for the year.
