By Dominic Chopping

 

Nokia Corp. on Thursday posted a forecast-beating first-quarter net profit as demand for mobile networks remains strong, but cautioned that supply-chain constraints continued to hurt sales, in addition to the timing of patent licensing renewals.

The supply situation remains constrained but Nokia said it expects to deliver sales growth in mobile networks in 2022 due to improved competitiveness.

Europe and Latin America had good growth in mobile networks, while sales in North America and greater China declined, it added.

The company's comparable net profit for the quarter rose to 409 million euros ($433.2 million) from EUR373 million a year earlier. Sales rose 5.4% to EUR5.35 billion, it said.

Analysts polled by FactSet had expected comparable net profit of EUR340 million on sales of EUR5.27 billion.

On a reported basis, Nokia posted a net profit of EUR212 million from EUR261 million a year earlier, it said.

"Overall, 1Q was a strong start for the year both in terms of net sales and profitability," Chief Executive Pekka Lundmark said.

"The demand environment remains strong and while supply-chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress toward our long-term targets," he said.

Nokia backed its 2022 guidance, anticipating sales of EUR22.6 billion to EUR23.8 billion in constant currency and an adjusted operating margin of 11% to 13.5%. However, adjusting for foreign exchange, the company lifted its revenue outlook to EUR22.9 billion-EUR24.1 billion.

Earlier this month, Nokia announced its intention to exit the Russian market and it recorded a EUR104 million provision in the first quarter in relation to the move.

The company's long-term target is to grow faster than the market and to achieve a comparable operating margin of at least 14%.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

April 28, 2022 06:13 ET (10:13 GMT)

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