Finland’s telecoms giant Nokia reported Thursday that it remained deep in the red at the start of the year, with sales in its main business, networks, on the decline.
The company posted a loss of 488 million euros ($532 million) in the first quarter, an improvement from the 609 million euros a year earlier, prompting chief executive Rajeev Suri to say he believed in an “improving business momentum, even if some challenges remain”.
Investors agreed with that assessment, sending Nokia’s share price more than three percent higher on the Helsinki stock exchange to 5.12 euros shortly after the opening.
While the company’s overall sales declined by two percent to 5.38 billion euros, sales in its core networks business fell by six percent, to 4.9 billion euros.
“We saw encouraging signs of stabilisation in mobile networks,” Suri told reporters in a conference call.
The company is eyeing business opportunities offered by the “path to 5G roadmap”, Suri said, referring to the worldwide roll-out of the lightening-fast 5G mobile internet service that operators expect to begin by 2020.
Once the world’s number one handset maker, Nokia transformed itself into a network equipment company and bought its hugely unprofitable French-American rival Alcatel-Lucent a year ago, sending the whole group’s results plunging into the red in 2016.
The firm recorded a net loss of 766 million euros last year, which Suri said in a statement was a “year of transition.”
But in fact the company has been going through a process of radical transformation for several years now.
In 2013, it bought 50 percent of its network activities from Germany’s Siemens, and the following year it pulled out of mobile phones.
It sold its mapping unit Here in 2015 and completed the deal late last year to buy Alcatel-Lucent, which had only recorded one year of annual profit since its inception in 2006.
Nokia was the world’s top mobile phone maker between 1998 and 2011 but was overtaken by South Korean rival Samsung after failing to respond to the rapid rise of smartphones.