Nokia has revised its profit forecast for 2025 downward by $300 million, a significant figure that raises questions about the company’s future. As a company that once dominated the mobile phone market, Nokia has shifted its focus away from smartphones and now specializes in technologies that support internet and mobile networks. Its core business involves providing infrastructure for phone carriers, large cloud companies, and enterprises, particularly in the realms of 5G, fiber optics, and data center solutions. Recently, Nokia expanded its capabilities by acquiring Infinera, aimed at enhancing its fiber and optical networking presence in North America.
According to Nokia’s new CEO, Justin Hotard, the revision in profit expectations is attributed to the weakened US dollar and pressures from trade tariffs. The decline of the dollar has affected the company’s overall operations and the financial performance of its investment funds. Hotard specifically pointed out that the fluctuations in currency posed challenges for both day-to-day business and venture funding. Additionally, tariffs associated with US trade policies are placing further strain on Nokia’s financial stability.
Although new tariffs on European goods from the Trump administration will not take effect until August 1, their anticipated impact is already being felt in the market. Hotard indicated that even the mere threat of these tariffs has disrupted regular business activities. In its second-quarter results, Nokia fell short of expectations, reporting a profit of $267 million and a net income of only $94 million from ongoing operations, compared to $435 million during the same quarter the previous year. Following this disappointing news, Nokia’s stock price dropped nearly 4%, reflecting investor concerns over the company’s financial outlook.
The current situation raises the question of whether it might be time for Nokia to reconsider its past strategies, including the possibility of re-entering the smartphone market.