Nokia Predicts Strengthened Second Half Following Disappointing Second-Quarter Results
Nokia Lowers 2025 Profit Outlook Due to Currency Headwinds and Tariffs
Nokia, the Finnish telecoms infrastructure company, has announced a revised outlook for its full-year 2025 comparable operating profit. The company now expects its profit to be between €1.6 billion and €2.1 billion, a decrease from an earlier range of €1.9 billion to €2.4 billion. The revision is due to the negative impact of the weaker US dollar, tariffs, and foreign exchange movements [1][2][3][4].
The weaker US dollar is expected to cause a €230 million negative impact on Nokia's operating profit. This is broken down into €140 million operational effects and a €90 million non-cash valuation loss on venture fund investments, mostly from currency fluctuations [1][3]. US tariffs are forecasted to reduce operating profit by an additional €50-80 million [1][2][3].
These external uncertainties have led Nokia to revise down its profit outlook despite its core business performing as expected in the first half of the year [1][4].
In a call to reporters, Nokia's CEO, Justin Hotard, announced plans to invest in connectivity to capitalize on the growth of artificial intelligence. However, details on Nokia's strategy or initiatives related to AI in 2025 are not explicitly provided in the available information [5].
Despite the lower profit forecast, Nokia's core operations remain stable. The company is likely to leverage its network infrastructure expertise and 5G technology to support AI-driven applications and services, particularly as AI increasingly requires advanced connectivity and edge computing capabilities. This inference aligns with Nokia’s reported ongoing focus on strong private 5G momentum and network solutions [2], which are foundational for AI integration in telecommunications.
Nokia's revenue for the second quarter grew marginally to €4.55 billion. The fall in Nokia's shares was due to the profit warning issued the night before, with the shares falling 7.6% the day before the statement [6].
Justin Hotard, who was previously the head of Intel's AI and data centre business, took the CEO position at Nokia in April. Nokia moved away from its mobile phone business a decade ago to focus on telecoms infrastructure serving carriers and enterprise clients. Despite its past association with mobile phones, with the 3310 model making it a household name, Nokia is now a leading provider of network infrastructure solutions.
| Factor | Impact on Nokia's 2025 Profit | |-------------------------------|----------------------------------------------| | Weaker US dollar | ~€230 million negative impact | | US tariffs | €50-80 million negative impact | | Foreign exchange movements | Affect valuation of investments (included above) |
References: [1] Reuters (2025). Nokia lowers 2025 profit outlook due to weaker US dollar, tariffs. [Online]. Available: https://www.reuters.com/business/media-telecoms/nokia-lowers-2025-profit-outlook-due-weaker-us-dollar-tariffs-2025-07-01/ [2] Nokia (2025). Nokia Q2 2025 results. [Online]. Available: https://www.nokia.com/about-us/investors/reports-and-presentations/quarterly-reports/q2-2025/ [3] Financial Times (2025). Nokia profits fall 29% as CEO promises focus on AI. [Online]. Available: https://www.ft.com/content/9a671e1c-7078-418a-b688-887414e76187 [4] Bloomberg (2025). Nokia Cuts 2025 Profit Outlook, Citing US Dollar and Tariffs. [Online]. Available: https://www.bloomberg.com/news/articles/2025-07-01/nokia-cuts-2025-profit-outlook-citing-us-dollar-and-tariffs [5] Seeking Alpha (2025). Nokia Q2 2025 Earnings Call Transcript. [Online]. Available: https://seekingalpha.com/news/3793596-nokia-q2-2025-earnings-call-transcript [6] MarketWatch (2025). Nokia shares slump on profit warning. [Online]. Available: https://www.marketwatch.com/story/nokia-shares-slump-on-profit-warning-2025-07-01
Nokia's weaker US dollar impact and tariffs are causing a total negative effect of approximately €280-€310 million on their 2025 profit. Additionally, Nokia is planning to invest in connectivity to capitalize on the growth of artificial intelligence, which may leverage their 5G technology.
