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Nokia's Q2 profit drops significantly
Helsinki: Nokia's operating profit declined sharply in the second quarter of 2018, announced the Finnish information technology company in its interim report released on Thursday.
Compared with the same period in 2017, Nokia's operating profit (non-IFRS) stood at 334 million euros, falling by 42 per cent, while its net sales was 5.32 billion euros, down by 6 per cent.
The slump in profitability was mainly attributed to the poor performance by Nokia's Networks business, the company's mainstay.
The operating profit (Non-IFRS) of Networks business slipped by 83 percent and its net sales dropped by 6 per cent.
Nokia Technologies, another section of the company, performed preferably in its operating profit, with 27 per cent growth from 230 million euros in the second quarter of 2017 to 292 million euros in the same period this year.
The company's profitability was lower than expectations. Analysts had forecasted that from April to June this year, Nokia's operating profit would be 373 million euros, 35 per cent less from a year earlier, according to a poll.
The market reacted negatively to Nokia's results. The company's share price declined by 9.1 per cent in the Helsinki Stock Market on Thursday morning.
The company management maintained this year's anticipations unchanged, and said that the upcoming commercial 5G networks would bring brighter prospects to its revenues.
"Nokia's Q2 2018 results were consistent with our view that the first half of the year would be weak followed by an increasingly robust second half," said Rajeev Suri, President and CEO of Nokia.
He added that Nokia expects market conditions to improve further in the second half, the company's seasonally strongest quarter, and as 5G accelerates significantly.