Network equipment maker Nokia posted weaker than expected quarterly profits as telecom operators, particularly in North America, held off spending, but the company sees momentum building later in the year.
Nokia said its mainstay networks business got off to a slow start in the first quarter and was likely to remain soft in the current second quarter. However, the market for next-generation 5G equipment would start to take off in the second half of 2018.
Shares in the Finnish company tumbled almost 8 percent to 4.55 euros at 0745 GMT.
“We expect an atypical seasonal trend, with softness in the first half of the year, offset by a very dynamic second half,” Chief Executive Rajeev Suri told reporters.
“We are confident we can outperform a strengthening (network) market and meet our full year guidance,” he added.
Nokia, which competes with Sweden's Ericsson, Huawei and ZTE, both of China, said the battered network industry was poised to bounce back as commercial roll-outs of next-generation 5G networks start to take off later in 2018 in North America, its biggest market.