Nokia has reduced its thargets for the current year. Operating profit is now expected to between €1.6bn and €2.1bn, compared with €1.9bn to €2.4bn previously. The main culprit is the dollar, which has been falling steadily in recent months. The company estimates that exchange rates will have a negative impact of €230m on its annual operating profit, while customs duties are expected to cost an additional €50m-€80m.
The problem is more structural
The situation is worrying as it comes at a time when demand remains weak overall for major telecom equipment manufacturers. Operators are holding back on network investments. This trend is hurting both Sweden's Ericsson, whose results published last week served as a warning signal, and Nokia, which is now fighting to maintain its margins.
However, Citigroup is seeking to temper expectations, as the US broker emphasizes that this revision is primarily linked to external factors—currencies, customs duties—and not to a collapse in demand or a sharp erosion of margins.
The fact remains that the last ten years have been anything but a success story for Nokia. And 2025 is unlikely to change that. In 2016, the group posted revenues of €23.9bn. Last year, revenues were only €20.3bn, down 15%. It has therefore been a decade almost entirely lost, especially since Nokia followed up with a 2020 financial year marked by huge losses (€2.4bn) and a challenging competitive position.
So what does Nokia have left to look forward to in the coming years? The acquisition of Infinera, an American specialist in long-distance optical networks and integrated photonic circuits, is seen as a potential lever for recovery. And the development of artificial intelligence infrastructure could offer opportunities. Nokia remains well positioned in optical networks. This field is set to grow with the rise in bandwidth requirements.
For now, the short-term headwinds are too strong to expect anything from the stock. 2025 will be more of the same, with the falling dollar and trade tensions hurting.
