Nokia Adjusts Profit Forecast for 2025 Amid Currency Challenges
Nokia's Revised Financial Outlook for 2025
Nokia Corporation has recently adjusted its financial guidance for the year 2025. The company has lowered its comparable operating profit forecast to a range of EUR 1.6 billion to EUR 2.1 billion, down from the previous estimate of EUR 1.9 billion to EUR 2.4 billion. This revision is primarily influenced by external factors, including currency fluctuations and tariffs that the company cannot control.
The exchange rate environment has shifted significantly, compelling Nokia to reconsider its forecasts. The company now anticipates that the weaker USD will negatively impact its profits, contributing to an estimated EUR 230 million loss in operating profits due to currency issues. This loss comprises EUR 140 million in operational impacts and EUR 90 million stemming from currency revaluations affecting its venture funds.
Analysis of Financial Results
In the preliminary financial results for the second quarter, Nokia has reported approximately EUR 4.55 billion in net sales and a comparable operating profit of EUR 300 million. This performance includes a negative adjustment of about EUR 50 million related to its venture funds, primarily due to adverse currency impacts. The updated guidance is based on a EUR:USD exchange rate of 1.17, a notable shift from the rate of 1.04 used at the start of the year.
Market Conditions Affecting Nokia
Several factors in the current market landscape are contributing to Nokia's revised outlook. In addition to currency fluctuations, tariffs are also expected to diminish operating profits by EUR 50 million to EUR 80 million. These external pressures highlight the challenges Nokia faces in maintaining its previous growth trajectory while navigating through unpredictable economic conditions.
Operational Insights from Nokia
Nokia has emphasized that its core business operations have performed consistently during the initial half of the year. Despite the adjustments, the company remains committed to its goals, which include maintaining a free cash flow conversion rate from comparable operating profit between 50% to 80%. This robust approach is aimed at adapting to external economic pressures and ensuring sustainable growth moving forward.
Nokia's leadership is dedicated to keeping investors informed and engaged with these developments. There will be a conference call on July 24, where analysts and investors can discuss Nokia's second-quarter performance and overall business outlook directly with the company’s management.
About Nokia's Innovations
Nokia has long been recognized as a leader in technology innovation, particularly in the B2B technology sector. The company is renowned for pioneering networks that integrate mobile, fixed, and cloud capabilities into cohesive systems that act collectively. Its advancements are underscored by Nokia Bell Labs, which is celebrating a century of transformative research and development. Nokia's commitment to open architectures and high-performance networks has placed it in a trustworthy position among service providers, enterprises, and global partners.
By focusing on reliable, secure, and sustainable networks, Nokia continues to develop new monetizing opportunities and innovative digital services for tomorrow's applications. The firm's impact on technology is profound, with continuous investments in research contributing to a future defined by seamless connectivity.
Frequently Asked Questions
What is Nokia's new operating profit guidance for 2025?
Nokia has revised its operating profit guidance to EUR 1.6 billion to EUR 2.1 billion for 2025.
What are the main reasons for the change in Nokia's profit outlook?
The changes are primarily due to currency fluctuations, particularly with the USD, and tariff impacts that are beyond Nokia's control.
When will Nokia release its Q2 financial results?
Nokia plans to release its second-quarter financial results on July 24, 2025.
How does Nokia maintain profitability amid economic changes?
Nokia aims for a free cash flow conversion rate from comparable operating profit between 50% to 80%, while adjusting to external market conditions.
What innovations does Nokia focus on?
Nokia specializes in technology solutions that enable secure and efficient mobile, fixed, and cloud network integrations across various sectors.
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