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Investing.com -- Shares of Nokia (HEL:HE:NOKIA) dropped over 7% on Wednesday after cutting its 2025 comparable operating profit guidance by 14% at the midpoint, citing currency headwinds from a weaker U.S. dollar and tariff impacts.
The Finnish telecommunications equipment maker on Tuesday lowered its profit outlook range to €1.6-2.1 billion from the previous €1.9-2.4 billion.
The company attributed approximately €230 million of the reduction to currency fluctuations, with €140 million from operational impacts and €90 million from non-cash venture fund revaluations.
Nokia’s revised guidance is now based on a EUR:USD rate of 1.17, compared to 1.04 used in January.
Nokia also reported preliminary second-quarter results that fell short of analyst expectations, with net sales of approximately €4.55 billion (5% below consensus) and comparable operating profit of €300 million (13% below consensus).
The Q2 profit figure includes a €50 million negative impact from the company’s venture funds, primarily related to currency.
"Nokia’s underlying business performed as expected through the first half," the company stated. "However, considering currency and tariff headwinds which are outside its control and have transpired since its Q1 results, the company feels it is prudent at this point to lower its operating profit outlook range."
The current tariff landscape is expected to impact full-year operating profit by an additional €50-80 million. Despite these challenges, Nokia maintained its free cash flow conversion target from comparable operating profit at 50-80%.
According to Jefferies, while the impact from currency and tariffs is understandable, the underlying business also appears relatively sluggish at the moment.
Nokia will release its complete second quarter and half-year 2025 financial results on Thursday, July 24.