Nokia swings to quarterly loss on tech licensing dip, one-off charge

24th April 2025 10:06

(Alliance News) - Nokia Corp on Thursday reported a swing to loss in the first quarter of 2025, as weaker licensing income and a one-off settlement charge in its mobile unit weighed on results, despite growth in network infrastructure.

Shares in Nokia were down 8.0% at EUR4.32 in Helsinki on Thursday.

The Espoo, Finland-based telecommunications and information technology company posted a net loss of EUR60 million in the three months to March 31, swung from a EUR438 million profit a year before. Diluted loss per share was EUR0.01, swung from EUR0.08 earnings.

Sales edged down to EUR4.39 billion from EUR4.44 billion a year before, while comparable operating profit fell sharply to EUR156 million from EUR600 million. This included a EUR120 million contract settlement in Mobile Networks.

The company blamed the downturn primarily on a sharp decline in licensing revenue at Nokia Technologies, which had booked over EUR400 million in catch-up sales in the prior year. Gross margin also dropped, to 42% from 50%, as comparable operating margin shrank to 3.6% from 13.5%.

However, Chief Executive Officer Justin Hotard highlighted robust performance in Network Infrastructure, which grew 11% on a constant currency and portfolio basis, with all sub-units contributing. The segment was boosted by the recent acquisition of Infinera, which added EUR143 million in March alone.

Nokia on Thursday also landed a major new 5G deal with T-Mobile US Inc to upgrade and expand its radio access network nationwide. Under the agreement, Nokia will supply its AirScale portfolio and AI-powered optimization software.

Looking ahead, Nokia reaffirmed its full-year outlook for comparable operating profit between EUR1.9 billion and EUR2.4 billion, and free cash flow conversion of 50% to 80%. While the company warned of potential short-term disruption from global tariffs, it said the broader market remains resilient.

By Eva Castanedo, Alliance News reporter

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