Finnish telecoms equipment maker Nokia saw profits in its core networks business drop 61 percent in the first quarter due to lower software sales, high costs and "challenging" market conditions, sending the company's shares lower by as much as 10 percent at the market open.
Nokia reported 85 million euros in first quarter operating profit in its Network division, down from the 216 million a year earlier, the company said on Thursday. Analysts polled by Reuters expected 226 million euros.
Despite this, net sales at the Nokia Networks business hit 2.67 billion euros, a 15 percent rise from the 2.32 billion euros reported in the same period last year. Operating margin also declined to 3.2 percent from 9.3 percent in the first quarter of 2014. Nokia said that it expects this to be between 8 percent and 11 percent for the full year.
Overall, group net profit rose to 177 million euros from a net loss of 239 million euros the same period last year.