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Nokia on Thursday reported quarterly operating profit below market expectations as the Finnish company is selling more 5G gear in low-margin markets and said it was seeing signs of customer spending slowing down.
First-quarter comparable operating profit fell to 479 million euros ($524.94 million) from 583 million last year, missing the 532.4 million euro mean forecast of analysts polled by Refinitiv.
Comparable gross margin fell to 37.7% from 40.7%.
“Looking forward, we are starting to see some signs of the economic environment impacting customer spending,” Chief Executive Pekka Lundmark said in a statement.
Apart from getting big contracts from telecom operators for launch of 5G, Nokia has also managed to diversify its base to industrial customers who set up their own private 5G networks at power plants, utilities and mines among others.
Net sales grew 10% in the quarter to 5.86 billion euros, beating estimates of 5.72 billion euros.
