Nokia boss warns on tariff battle; Q1 profit drops
Nokia’s new CEO Justin Hotard cautioned of short-term disruption resulting from the global tariff situation with operating profits set to take a further hit in the second quarter, as the Finnish vendor reported a mixed set of Q1 results.
In Hotard’s first earnings announcement since taking the role on 1 April, he said the company was expecting a €20 million to €30 million impact to its comparable operating profit in Q2 from current tariffs.
Hotard explained Nokia was not immune to the rapidly evolving global trade landscape but backed its markets to prove resilient.
“Given the lack of visibility, we have not taken an assumption related to tariffs in the second half of 2025,” he added.
He also said the company could continue to utilise the flexibility of the company’s global manufacturing network to minimise impact of the evolving tariff landscape.
The Financial Times further reported Hotard said he would “absolutely entertain” increasing Nokia’s US manufacturing to mitigate the impact of the tariffs.
The company notably already has five manufacturing facilities in the US, including two semiconductor factories.
Q1 financials
First quarter net sales declined 1 per cent year-on-year to just shy of €4.4 billion, as it pointed to a challenging year for its Technologies division.
Net sales from the unit slipped 51 per cent to €369 million, while there were positives in other areas of the business.
Net sales from Network Infrastructure grew 20 per cent to €1.7 billion “with all units contributing to growth and its backlog increased”, noted Hotard. Cloud and Network Services delivered 4 per cent sales growth, due to strong demand for its 5G core and deals with the likes of T-Mobile US, Ooredoo Qatar and Telefonica.
Sales from Mobile Networks increased 3 per cent to €1.7 billion, with Hotard stating it was seeing positive signs of stabilisation. However, while sales increased, an unexpected one-time contract settlement meant it took a €120 million profitability hit from the unit.
This contributed to an overall profitability drop of 74 per cent to €156 million, from €600 million in Q1 2024.
T-Mobile deal
In the US, Nokia received a boost as it announced a “significant multi-year extension” to its partnership with T-Mobile US. Nokia said it would provide enhanced 5G connectivity for T-Mobile’s network, deploying next-generation baseband and radio technologies.
Under the agreement, Nokia added it will provide RAN gear and deploy AI-powered offerings to the US operator, covering hardware, software, maintenance and support services.
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