By Dominic Chopping

Nokia said the first quarter marked the low point in mobile networks demand, with activity expected to progressively pick up through the remainder of 2024.

The Finnish telecommunications company's first-quarter earnings beat expectations, with lower sales of its gear offset by a one-off bump from catch-up payments related to delayed licensing deals with cell phone manufacturers.

High inflation and rising interest rates led network operators to spend cautiously, particularly weighing on its mobile networks business, but network-infrastructure orders have slowly ticked higher over the last couple of quarters, it said.

Nokia's comments come after Swedish rival Ericsson earlier this week said it expects sales to stabilize during the second half of the year despite the mobile-network market continuing to fall.

The two Nordic telecom-gear giants have seen 5G work dry up in North America while frantic rollouts in India are moderating, prompting them to rightsize their organizations and find cost savings to cushion margins. Both companies are cutting thousands of jobs globally.

Overall, sales at Nokia's key mobile networks business fell 39% on year, and while network infrastructure sales declined 26% on the year, Nokia said improving order intake momentum seen in the fourth quarter of 2023 continued in the first quarter.

"This gives continued confidence that...the business will see much stronger trends into the second half of 2024, supporting the assumption that network infrastructure will return to growth on a constant currency basis in full year 2024," Nokia Chief Executive Pekka Lundmark said.

The company still expects to deliver comparable operating profit of between 2.3 billion euros and 2.9 billion euros ($2.45 billion-$3.1 billion) in 2024 compared with EUR2.38 billion in 2023.

Write to Dominic Chopping at

(END) Dow Jones Newswires

04-18-24 0204ET