Nokia chief Rajeev Suri (pictured) said the company’s first quarter numbers “demonstrated our improving business momentum, even if some challenges remain”, with its mobile networks business described as “clearly the highlight of the quarter”.

“We slowed the rate of topline decline and generated healthy orders in what is typically a seasonally weak quarter for us,” he said.

Net sales in its Ultra Broadband Networks unit, which includes both mobile and fixed products, decreased 4 per cent year-on-year to €3.6 billion. Mobile networks sales of €3.1 billion were down 1 per cent year-on-year, with fixed sales of €501 million down by 19 per cent.

Nokia’s fixed networks performance compared with “a particularly strong first quarter 2016”, with the company also noting the completion of an engagement in Asia Pacific, and another customer reducing spending in Latin America.

The mobile decrease was primarily due to services, partially offset by network products.

Profitability in mobile networks benefited from a shift in regional mix (with a higher proportion of sales in North America) , and business mix (with a lower share of services sales). However, fixed profitability was impacted by the lower sales, with gross margin “solid” year-on-year.

In its quarterly highlights, the company flagged its largest-ever contract by revenue in Latin America, with consortium Altan Redes, to build a “major mobile broadband network” in Mexico. It will use Nokia’s 4.5G Pro radio, and IP and optical backhaul, to deliver coverage to 92 per cent of the country’s population.

Sales in Nokia’s Technology unit increased 25 per cent year-on-year to €247 million. Of this, €231 million related to patent and brand licensing, and €16 million to digital health and digital media.

The numbers were boosted by an IPR licensing agreement which was expanded in Q3 2016, Nokia’s brand partnership with device maker HMD Global, one-off sales related to a new agreement in Q1, and its acquisition of wearables company Withings.

Cautiously optimistic
On a group level, the company reported a loss for the quarter of €473 million, compared with a prior-year loss of €623 million, on revenue of €5.4 billion, down 2 per cent from €5.5 billion.

It attributed the reduced loss to lower operating loss (€127 million, compared with €712 million), partially offset by higher taxes, a negative fluctuation in non-controlling interest and a net negative fluctuation in financial income and expenses.

“Overall, given Nokia’s performance in the first quarter, I am optimistic about the year ahead, even if cautiously so,” Suri said.