Finland-based Nokia Corp. (NYSE:NOK) stock is trading lower on Thursday after its first-quarter FY25 earnings.

The telecommunications major opened 2025 with mixed financial results, with net sales sliding 3% year-over-year on a constant currency and portfolio-adjusted basis.

The Network Infrastructure segment posted an 11% rise, and Cloud and Network Services increased by 8%. Mobile Networks also edged up 2%, offering some resilience amid broader headwinds stemming from a tough comparison with the prior year's performance in Nokia Technologies.

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The company reported a huge drop in gross margins, down 820 basis points year-over-year to 42.3% on a comparable basis, driven by reduced revenues from Nokia Technologies and a 120 million euros ($136.57 million) charge related to contract settlements in Mobile Networks.

Operating margins also shrank to 3.6% on a comparable basis. Diluted earnings per share for the first-quarter came in at 0.03 euros ($0.034).

"Regarding the tariff situation, there could be some short-term disruption. We will continue to utilize the flexibility of our global manufacturing network to minimize impact of the evolving tariff landscape. Based on what we see today, we currently expect a 20 to 30 million euros impact to our comparable operating profit in the second quarter from the current tariffs," said President and CEO Justin Hotard.

Nokia reaffirmed its full-year outlook, maintaining a projected operating profit between 1.9 billion euros and 2.4 billion euros and a free cash flow conversion rate of 50% to 80%.

In other news, Nokia has deepened its collaboration with T-Mobile US Inc. (NASDAQ:TMUS) through a new agreement focused on enhancing and extending 5G services nationwide.

Nokia will provide a range of advanced solutions from its AirScale Radio Access Network lineup to elevate the Un-carrier's connectivity reach and performance.

The partnership involves rolling out Nokia's Habrok Massive MIMO antennas and Levante baseband platforms, both driven by the company's energy-efficient ReefShark chip technology.

These systems are designed to boost the network's performance, stability, and data speeds while minimizing power usage. Additionally, AI-driven solutions such as MantaRay SON and AutoPilot will help streamline and enhance T-Mobile's network's operational efficiency.

T-Mobile's network now covers over 332 million people and two million square miles, and Nokia has been its trusted RAN partner for many years.

Price Action: NOK shares traded lower by 8.29% at $4.87 at the last check on Thursday.

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