The introduction of Donald Trump’s tariffs is set to create a notable but manageable impact on Nokia, as outlined by CEO Justin Hotard.
Although the company is not immune to shifts in global trade policies, initial customer feedback suggests that demand across key markets should remain relatively resilient.
Tariff challenges
However, Nokia is bracing for short-term disruptions, estimating a direct impact of €20 to 30 million on its comparable operating profit in the second quarter of 2025 due to the tariffs. Given the uncertainty surrounding the latter half of the year, the company has chosen not to incorporate further tariff assumptions into its H2 outlook.
“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. We expect a €20 to 30 million impact to our comparable operating profit in the second quarter from the current tariffs. Given the lack of visibility, we have not taken an assumption related to tariffs in the second half of 2025,” Justin Hotard, President and CEO of Nokia, said.
“In 2025, we continue to expect strong net sales growth in Network Infrastructure, growth in Cloud and Network Services and largely stable net sales for Mobile Networks. In Nokia Technologies we expect approximately €1.1 billion of operating profit,” Justin Hotard said.
Despite the challenges posed by the evolving tariff environment, Nokia remains focused on its growth strategy. The company plans to continue investing in high-potential areas such as Network Infrastructure and Cloud and Network Services, both of which have shown strong performance.
Nokia sales
Nokia has reported 1 percent drop in sales to €4.39 billion for the quarter. Gross margin also fell from 49.7 percent in Q1 2024 to 41.5 percent in Q1 2025, reflecting growing cost pressures.
In comparing Nokia’s net sales figures by region for Q1 2025 and Q1 2024, several key shifts are evident across global markets. While regions like North America and India posted impressive gains, declines in Europe and Greater China weighed on the global total.
In the Americas, sales rose significantly by 23 percent, from €1,204 million in Q1 2024 to €1,482 million in Q1 2025. This growth was driven primarily by North America, which surged 28 percent, reaching €1,319 million compared to €1,031 million the previous year. In contrast, Latin America experienced a decline of 6 percent, falling from €173 million to €163 million.
In the APAC region, sales increased 12 percent, growing from €947 million to €1,064 million. The most notable rise came from India, where sales jumped 75 percent, climbing from €265 million to €464 million.
However, this regional growth was offset by a 19 percent decline in Greater China, where sales dropped from €243 million to €198 million, and an 8 percent dip in the Rest of APAC, from €439 million to €402 million.
Meanwhile, the EMEA region saw a significant overall decline of 20 percent, with net sales dropping from €2,293 million to €1,844 million. The bulk of this drop came from Europe, where sales fell by 24 percent, from €1,833 million to €1,400 million. The Middle East & Africa segment remained relatively stable, showing only a 3 percent decrease, moving from €460 million to €444 million.
Main business units
In Q1 2025, Network Infrastructure grew by 20 percent to €1.722 billion, while Cloud and Network Services increased by 4 percent to €567 million.
Mobile Networks, although facing an unexpected charge, still registered a 3 percent rise to €1.729 billion in revenue.
Nokia Technologies, however, experienced a significant 51 percent decline to €369 million.
Future
To mitigate tariff-related disruptions, Nokia is leveraging the flexibility of its manufacturing network, which allows for agile adjustments in supply chains and production locations. This strategic flexibility is aimed at minimizing operational bottlenecks and maintaining delivery timelines.
Looking ahead, Nokia maintains its full-year operating profit guidance between €1.9 and 2.4 billion, though the upper range may now be more difficult to achieve.
Baburajan Kizhakedath