Shares of Finnish telecom firm Nokia (NYSE:NOK) tumbled on Thursday after the company reported a 32% drop in second-quarter operating profit on the back of weak demand for its 5G equipment.
The shares opened in New York down 24.5 cents, or 6.29% to $3.66.
Earlier in the day, Nokia said its comparable operating profit declined to 423 million euros ($462 million) in the second quarter, down by nearly a third from the 619 million euros posted in the same period of last year.
Citing “ongoing market weakness,” the company said net sales also eased by 18% to 4.47 billion euros – the lowest level achieved since the fourth quarter of 2015, according to LSEG data.
“The most significant impact was the challenging year-ago comparison period which saw the peak of India’s rapid 5G deployment with India accounting for three quarters of the decline,” Nokia CEO Pekka Lundmark said in the earnings release.
The landscape likewise remains “challenging as operators continue to be cautious” in the mobile networks sector, he warned.
Nokia nevertheless forecasts a “stabilizing” industry environment and a “significant acceleration in net sales growth in the second half” of the year, based on the order intake experienced in recent quarter.
Nokia suffered a huge blow from the loss of a major North American contract late last year, when U.S. telecoms juggernaut AT&T selected
Ericsson as a supplier to build a telecom network that uses only so-called ORAN technology.
