By Andrea Figueras and Dominic Chopping

Nokia cut its earnings expectations as currency headwinds and tariff costs damp the outlook for profitability this year.

The Finnish maker of telecommunication equipment said Tuesday that foreign exchange fluctuations since the first months of the year, in particular the weaker U.S. dollar, have hit the company's full-year expectations for operating profit. On top of that, the current tariff landscape is also expected to weigh on profitability.

It now anticipates comparable operating profit between 1.6 billion euros and 2.1 billion euros ($1.87 billion-$2.46 billion) in 2025. This compares with a previous forecast in a range of 1.9 billion euros and 2.4 billion euros.

Analysts had cautioned that currency would be a key headwind in the second quarter, with JPMorgan analyst Sandeep Deshpande noting that the main risk for Nokia shares is that consensus may not have corrected enough for the substantial euro/dollar shift.

The U.S. dollar has weakened against the euro by 7.7% from the first quarter and 5.3% year-on-year, implying a 4.2% sequential headwind to revenue, which Deshpande said in a recent note to clients could make it challenging for the company to hit guidance.

Nokia said it anticipates a negative impact from currency fluctuations of roughly 230 million euros, while current tariffs are expected to hurt full-year operating profit by 50 million euros to 80 million euros.

Although it hadn't previously provided full-year expectations for a tariff hit, it had guided for a 20 million-euro to 30 million-euro hit in the second quarter.

Meanwhile, the group reported preliminary figures for the second quarter, with net sales of around 4.55 billion euros and comparable operating profit of 300 million euros. Analysts polled by FactSet had been looking for comparable operating profit of 388 million euros on sales of 4.81 billion euros.

Nokia is scheduled to publish full results on July 24.

Write to Andrea Figueras at andrea.figueras@wsj.com and Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

July 22, 2025 13:00 ET (17:00 GMT)

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