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Investing.com -- Nokia (ST:NOKIA) on Thursday reduced its full-year profit forecast after currency fluctuations and tariff impacts offset growth in its network infrastructure and cloud segments during the second quarter of 2025.
The telecom company now expects comparable operating profit for the full year between €1.6 billion and €2.1 billion, down from a previous range of €1.9 billion to €2.4 billion.
The revision reflects an estimated €230 million hit from foreign exchange rates, including €90 million from non-cash currency revaluation tied to venture fund investments, and a €50 million to €80 million impact from tariffs.
In Q2, comparable net sales totaled €4.55 billion, up 2% on a reported basis but down 1% when adjusted for currency and portfolio changes.
Mobile Networks revenue dropped 13%, primarily due to a prior-year contract settlement benefit.
Network Infrastructure grew 8%, Cloud and Network Services rose 14%, and Nokia Technologies increased 3% on a comparable basis.
Comparable operating profit declined 29% to €301 million, with operating margin falling to 6.6% from 9.5% a year earlier.
Reported operating profit was €81 million, down 81%. Gross margin held steady at 44.7% on a comparable basis.
Earnings per share came in at €0.04 on a comparable basis, down from €0.06. Reported diluted EPS was €0.02, compared to negative €0.03 in Q2 2024.
Profit from continuing operations dropped to €83 million from €370 million. Discontinued operations posted a €13 million gain.
Network Infrastructure revenue rose 25% to €1.9 billion on a reported basis and 8% on a constant currency and portfolio basis, with Optical Networks showing strong order intake.
Operating profit grew 12% to €109 million; the margin dipped to 5.7% due to integration costs from the Infinera (NASDAQ:INFN) acquisition.
Mobile Networks sales fell 17% to €1.73 billion. Operating profit dropped 58% to €77 million, with margin narrowing to 4.4%. Sales declined in North America, India and Greater China.
Cloud and Network Services recorded €557 million in sales, up 14% on a constant currency and portfolio basis.
Operating profit turned positive at €9 million, with gross margin up 520 basis points to 42.7%.
Nokia Technologies posted flat revenue at €357 million and a 1% dip in operating profit to €255 million. Gross margin remained at 100%.
Sales to communications service providers declined 4%, while enterprise sales rose 15%.
Free cash flow totaled €88 million in the quarter and €809 million for the first half. Net cash ended at €2.9 billion, with total cash at €5.97 billion, down from €7.16 billion in Q1.
The board declared a €0.04 per share dividend to be paid August 7. CEO Justin Hotard, who took office in April, will present strategy updates at Nokia’s Capital Markets Day on November 19.