Trends
Nokia lowers profit outlook as currency and tariffs hit earnings
Nokia Q2 2025 operating profit drops on currency and tariff pressures; Mobile Networks contracts while Network Infrastructure gains.
Headline
Nokia Q2 2025 operating profit drops on currency and tariff pressures; Mobile Networks contracts while Network Infrastructure gains.
Context
Nokia reports Q2 net sales of €4.55 billion ($4.93 billion), up 2 per cent year-on-year in reported terms, though down 1 per cent on a constant-currency and portfolio basis. Comparable operating profit drops to €301 million ($326 million), a 29 per cent fall from last year, with a reduced operating margin of 6.6 per cent . Nokia attributes the fall in profitability to a €50 million ($54 million) loss related to a venture fund, €60 million ($65 million) from foreign-exchange revaluation, and €50–80 million ($54–87 million) from US tariffs. Earnings per share land at €0.04 ($0.043), below the expected €0.0536 ($0.058). Free cash flow stands between €88 million and €100 million ($95–108 million). Net cash falls to €2.9 billion ($3.14 billion), down 47 per cent year-on-year, mostly due to M&A and share buybacks.
Evidence
Pending intelligence enrichment.
Analysis
Also read: Nokia’s Enscryb secures key partner and customers Also read: Nokia and Converge join forces in Philippine data centres Nokia lowered its full-year operating profit guidance from €1.9–2.4 billion ($2.06–2.6 billion) to €1.6–2.1 billion ($1.73–2.28 billion), citing macroeconomic impacts. A weaker US dollar alone cut €120–130 million ($130–141 million) from expected operating profit. US tariffs added another €50–80 million ($54–87 million) in cost. These pressures reflect growing exposure of European telecom firms to trade and currency volatility, even when core business units perform steadily. Mobile Networks revenue dropped by 13 per cent in constant-currency terms, indicating difficulties in one of Nokia’s key segments. Meanwhile, Network Infrastructure revenue rose 8 per cent, and Cloud and Network Services increased 14 per cent, suggesting growing demand in enterprise and data centre segments. Investors reacted to the forecast cut with caution. Nokia’s share price fell over 7 per cent after the announcement. The company continues to highlight long-term drivers, including demand from hyperscale customers for optical transport and edge platforms. However, its near-term ability to protect margins remains in question despite a stable cash position and proposed dividend of €0.04 per share ($0.043).
Key Points
- Operating profit drops 29 per cent as tariffs and currency revaluation cut nearly €230 million ($249 million) from quarterly performance
- Network Infrastructure grows modestly but Mobile Networks shrinks; full-year profit range lowered by €300 million ($325 million)
Actions
Pending intelligence enrichment.
