Inflation has been a theme throughout first-quarter earnings and that was no exception during Nokia’s quarterly presentation on Thursday.
"It's very clear that prices are going up," Nokia CEO Pekka Lundmark told Reuters. "There is inflation in parts, there is inflation in semiconductors, there is inflation pretty much in everything."
The Finnish company reported adjusted operating profit of 583 million EUR, or $612 million U.S., beating an average analyst estimate of 501 million EUR, Bloomberg noted.
Nokia’s mobile networks division declined 4% in the quarter due to supply chain constraints, but the company said demand remains strong and it expects to return to growth this year due to its “improved competitiveness.”
“Our 5G core business continued to drive good growth in cloud and network services,” Lundmark said in a press release.
Overall, “Q1 was a strong start for the year both in terms of net sales and profitability. The demand environment remains strong and while supply chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress towards our long-term targets,” Lundmark said.
During the quarter, net sales grew 5% year over year to 5.35 billion EUR, beating estimates of 5.26 billion.
Network infrastructure grew 9% in constant currency in the quarter, driven by demand in both fixed and submarine networks. Cloud and network services also performed well, growing 5% in constant currency.
The company said its full-year 2022 outlook remains the same.
In April, Nokia announced it was exiting the Russian market while still providing the necessary support to customer networks in Russia.
At that time, Nokia said it didn’t expect the decision to impact its ability to achieve its 2022 outlook provided in its most recent financial report. However, it noted that it would result in a provision of about $109 million in the first quarter.