Nokia said networks business sales fell 12 percent to EUR 4.324 billion or $5.264 billion, with operating profit of EUR 43 million in Q1 2018.
27 percent drop in telecom equipment sales in North America was the main reason for the overall poor performance of Nokia.
Nokia’s Ultra Broadband Networks business generated EUR 1.857 billion (–17 percent) revenue in Q1.
Global Services revenue of Nokia was EUR 1.239 billion (–9 percent) in the first quarter of 2018.
Nokia said the IP Networks and Applications revenue was EUR 1.228 billion (–6 percent) in the first quarter.
Nokia Networks business in Q1 2018
Ultra Broadband Networks EUR 1.857 billion (–17 percent)
Global Services EUR 1.239 billion (–9 percent)
IP Networks and Applications EUR 1.228 billion (–6 percent)
Region-wise sales of Nokia Networks business in Q1 2018
Asia-Pacific EUR 906 million (–13 percent)
Europe EUR 985 million (+1 percent)
Greater China EUR 474 million (–15 percent)
Latin America EUR 290 million (+28 percent)
Middle East & Africa EUR 426 (+6 percent)
North America EUR 1.245 billion (–27 percent)
Nokia, a leading telecom equipment maker based in Finland, faced lower sales in North America which is home for telecom operators such as Verizon Wireless, AT&T, T-Mobile and Sprint. Nokia expects sales in North America as well as profitability to improve significantly in the second half of 2018.
All the telecom operators in the North American telecom market have ambitious 5G growth plans in place to generate revenue from both residential and enterprise customers in order to arrest its declining revenue streams.
Based on firm orders, Nokia sees customer demand for 5G accelerating further, particularly in North America, where it expects commercial 5G network deployments to begin near the end of 2018.
Nokia achieved double-digit growth in sales and order intake from enterprise vertical and webscale companies.
Nokia said one third of its sales pipeline now comprised of solutions, products and services from multiple business groups.
Nokia Technologies sales grew 48 percent to EUR 365 million, with operating profit of EUR 274 million — primarily related to license agreements entered into in 2017.
Nokia Technologies continued to make good progress on new patent licensing agreements, as well as brand and technology licensing agreements; no major agreements were announced in Q1.
Nokia said the telecom networks market conditions will be improving and 5G accelerating further, with strong momentum building by year end.
Nokia now sees a stronger primary addressable market for its Networks business in full year 2018 and expects its Networks business to outperform its primary addressable market in full year 2018.
Nokia remains on target to deliver EUR 1.2 billion of recurring annual cost savings in 2018. “Our active efforts to drive 5G adoption are expected to result in EUR 100 to 200 million of temporary expenses in 2018 to support 5G customer trials,” Nokia CEO Rajeev Suri said.