Finnish telecommunications equipment maker Nokia faced a challenging start to the year, reporting first-quarter profits on Thursday that fell significantly short of market expectations.
Compounding the weaker-than-anticipated results, the company explicitly warned of near-term disruptions stemming from US tariff policies, projecting a tangible impact on its upcoming second-quarter earnings.
Q1 profit falls short, sales dip slightly
Nokia’s comparable operating profit for the first quarter of 2025 landed at 156 million euros (approximately $176.9 million).
This figure represented a substantial 36% miss compared to the average analyst forecast of 243.83 million euros, compiled by LSEG.
Quarterly net sales also showed a slight year-on-year decline, totalling 4.39 billion euros, down 1% and marginally below the 4.41 billion euros anticipated by analysts.
US tariff impact looms over Q2
Looking ahead, Nokia flagged specific financial headwinds expected in the second quarter directly related to the implementation of sweeping tariffs by the administration of US President Donald Trump.
The company estimated a negative impact on its Q2 profit ranging between 20 million and 30 million euros.
This anticipated disruption arises from concerns that businesses might hesitate or pause equipment orders due to fears of tariff-driven price increases, potentially countering recent positive trends for Nokia in the crucial North American market.
Despite facing stiff competition from Nordic rival Ericsson, Nokia had previously noted steady sales growth in North America following years of weaker performance.
Strategic US partnership extended amid challenges
Offsetting some of the near-term concerns, Nokia simultaneously announced a significant positive development in its US operations.
The company confirmed a strategic multi-year extension of its partnership with major carrier T-Mobile.
This collaboration is focused on further expanding T-Mobile’s 5G network coverage across the United States, highlighting Nokia’s continued integral role in the build-out of next-generation wireless infrastructure.
Full-year outlook reaffirmed, Infinera integration included
Despite the first-quarter profit miss and the anticipated Q2 tariff impact, Nokia management expressed confidence in its broader trajectory by reaffirming its financial outlook for the full fiscal year.
Notably, this confirmed outlook now incorporates the company’s pending acquisition of optical networking specialist Infinera, signaling that the integration plan remains on track despite the current market headwinds.
The confirmation suggests Nokia believes it can navigate the immediate challenges while pursuing its longer-term strategic growth objectives.
The post Nokia Q1 profit misses mark, warns US tariffs will impact Q2 earnings appeared first on Invezz
