Charles EstherNokia began 2025 on a shaky note, falling short of financial expectations in the first quarter.
The company reported an operating profit of €156 million, a steep decline from the €600 million recorded in Q1 2024.
Analysts had projected earnings of around €244 million, making the current figures a significant miss.
The disappointing results were largely due to a drop in net sales at Nokia Technologies and an unexpected contract settlement charge.
These factors combined to create a challenging financial landscape for the telecom equipment giant.
U.S. Tariffs Add Further Pressure
Adding to the company’s woes are newly implemented tariffs by the U.S. government.
Nokia expects these tariffs to shave €20–30 million off its second-quarter operating profit.
This development has raised concerns about the company’s ability to meet its 2025 full-year profit guidance, which is currently set between €1.9 billion and €2.4 billion.
T-Mobile Partnership Offers Strategic Lifeline
Despite its financial setbacks, Nokia scored a major win by extending its partnership with T-Mobile in the United States.
The agreement focuses on expanding T-Mobile’s 5G network infrastructure using Nokia’s advanced solutions.
This collaboration strengthens Nokia’s foothold in the critical U.S. market, which plays a pivotal role in its long-term strategy.
New CEO Eyes U.S. Manufacturing Expansion
Justin Hotard, who assumed the role of Nokia CEO on April 1, 2025, is already taking proactive steps to mitigate financial and operational risks.
One such initiative is exploring the expansion of Nokia’s manufacturing capabilities within the United States.
Hotard sees this move as a way to build resilience against international trade disruptions while strengthening the company’s presence in one of its most important markets.
Enterprise Demand Remains a Bright Spot
While the consumer telecom segment faced hurdles, Nokia continues to see steady demand from enterprise clients.
Businesses across various sectors are investing in private wireless networks and industrial-grade 5G infrastructure, areas where Nokia has a strong product offering.
This demand provides a buffer against market volatility and underpins Nokia’s broader growth prospects.
Looking Ahead: Recovery Hinges on Execution
Nokia’s path forward depends on how effectively it can manage new tariffs, control costs, and capitalize on its T-Mobile alliance.
The potential expansion into U.S. manufacturing could not only offset tariff impacts but also enhance its supply chain efficiency.
With enterprise demand holding steady and strategic partnerships growing stronger, Nokia could still make a strong comeback later in 2025.
