Nokia disclosed a quarterly operating profit that fell short of market expectations on Thursday, despite the fact that the Finnish telecom equipment maker continues to gain from strong demand from phone companies as they roll out 5G networks.

Third-quarter comparable operating profit increased to 658 million euros ($643.3 million) from 633 million last year, falling short of the 690.6 million euro mean forecast of 10 Refinitiv analysts polled.

While increasing macroeconomic and geopolitical uncertainty may have an impact on some customers’ capex spending, Nokia expects constant currency growth in its markets in 2023, according to Chief Executive Officer Pekka Lundmark.

“Considering our recent success in new 5G deals in regions like India which are expected to ramp up strongly in 2023, we believe we are firmly on a path to outperform the market and to make progress towards achieving our long-term margin targets,” he said.

Net sales increased 6% in constant currency to 6.24 billion euros in the third quarter, exceeding expectations of 6.06 billion.

However, the comparable operating margin fell year on year to 10.5% from 11.7 per cent as improved profitability in Mobile Networks and Network Infrastructure was offset by contract renewal timing effects in Nokia Technologies, according to the company.

On Thursday, rival Ericsson reported lower-than-expected core earnings.

Nokia’s share price is down 15 per cent year to date, outperforming Ericsson’s 28% drop and keeping pace with European telecoms stocks, which are down 15 per cent on average in 2022.

(Adapted from EuroNews.com)