Finnish telecom equipment supplier Nokia opened a new tab on Thursday and reported a 27 per cent drop in fourth-quarter operating profit, hurt by lower demand for 5G gear across North America and a slowdown in markets such as India, but still beat expectations. Comparable earnings before interest and tax (EBIT) fell to 846 million euros ($920.19 million) from 1.15 billion euros a year earlier, beating the 767.5 million euros expected by analysts in an LSEG poll.

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Nokia, however, saw improvement in gross margins boosting profits as sales of products shifted towards software, which brought in higher margins. Gross margin rose to 43.1 per cent from 41.4 per cent a year earlier. "Looking ahead, we expect the challenging environment of 2023 to continue during the first half of 2024, particularly in the first quarter," CEO Pekka Lundmark said in a statement.
Telecoms equipment suppliers, including Swedish rival Ericsson, open a new tab, are set for a challenging year as mobile operators tighten their purse strings on new 5G gear purchases.

Nokia had warned, opening a new tab in late December that it wouldn't meet its full-year 2023 targets, citing the pending resolution of patent disputes. On Wednesday, the company said it had signed a patent deal with Chinese smartphone maker Oppo. Comparable net sales dropped 23 per cent to 5.71 billion euros, missing estimates of 6.28 billion euros.