MW The good news is that Nokia is getting more U.S. business. That's also the bad news.

By Steve Goldstein

Nokia quantifies tariff hit as first-quarter profit misses expectation

Telecom equipment maker Nokia is getting more business from a key U.S. client while tariffs are set to hit its profits, the company disclosed on Thursday.

Nokia (FI:NOKIA) $(NOK)$ fell as much as 10% as the Finnish company reported a first-quarter earnings miss, disclosed how much tariffs will hit its second-quarter profit and declined to quantify the tariff impact on the full year. It reiterated its financial targets for the year but said the top of the range will be more challenging to meet.

Its comparable operating profit tumbled 74% to EUR156 million ($177 million) as sales fell 1% to EUR4.39 billion.

Nokia disclosed an unexpected one-time contract settlement with a net impact of EUR120 million, from a single customer that started shipping in 2019 but that it otherwise did not identify. Even excluding the charge, Nokia's profit would've missed the analyst consensus estimate by 9%, according to UBS.

Nokia said tariffs will be a EUR20 million to EUR30 million drag on profits in the second quarter.

"We are not immune to the rapidly evolving global trade landscape, however, based on early customer feedback, I believe our markets should prove to be relatively resilient," said Nokia's new CEO, Justin Hotard, who took the helm at the beginning of the month.

Hotard pointed out on a conference call that Nokia already has a U.S. presence that can help mitigate the tariff impact. "One thing I will just also note is we actually have five manufacturing facilities in the U.S. today, two that are coming with Infinera with the acquisition and three others pre-existing," he said, according to a FactSet transcript.

Nokia closed its $2.3 billion purchase of Infinera in February.

"This is about giving us incremental access in the U.S. which is a high-growth geography, and of course, with hyperscale customers who are driving much of the AI and data center build," said Hotard of the deal. He said artificial intelligence is also driving new connectivity demands between data centers.

Nokia announced what it called a significant multiyear extension of a radio access network supply deal with T-Mobile U.S. $(TMUS)$.

There had been speculation that Nokia could lose this contract, as had occurred with AT&T $(T)$, pointed out JPMorgan analysts.

-Steve Goldstein

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April 24, 2025 08:47 ET (12:47 GMT)

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