Nokia reported a 32% drop in operating profit in the second quarter due to weak demand for its 5G telecom equipment, but the Finnish company hopes to recover by the end of 2024 thanks to orders from North America.

Excluding some expense items and asset revaluations to make it comparable to last year’s results, profit fell to 423 million euros from 619 million euros in the second quarter of last year. Nokia and rival Ericsson have faced falling demand for telecoms equipment and cuts affecting thousands of jobs. Net sales fell 18% year-on-year, signaling a slowdown in 5G investment in India after strong growth a year ago. Jefferies analysts said sales and earnings excluding non-recurring items missed estimates, and Nokia shares were down 8% as of this morning.

Nokia CEO Pekka Lundmark said the sales recovery was taking longer than previously expected, but last week Ericsson made a similar forecast, saying it expected net sales to rise in the second half of the year. The Finnish company’s chief noted the restoration of the fiber optic market in the United States and the country’s current $42 billion program to expand citizens’ access to high-speed broadband internet.

Nokia and Ericsson can also increase financial indicators at the expense of the European market, where Chinese companies continue to lose positions – it recently became known that Germany decided to completely abandon Huawei and ZTE 5G equipment by 2029. Mr. Lundmark said that Nokia is still studying the possible impact of this decision, the company did not change its annual forecast for comparative operating profit.