Nokia’s newly appointed CEO, Justin Hotard, has expressed openness to expanding the company’s manufacturing operations in the United States as a measure to counteract the effects of tariffs initiated during former President Donald Trump’s tenure. The Finnish telecommunications company estimates that these tariffs will impact its second-quarter comparable operating profit by approximately $22 million to $34 million. Following the announcement of weak first-quarter earnings, Nokia’s shares decreased by 6% on Thursday.
In the first quarter, Nokia recorded a net loss of $68.2 million, a significant drop from a net profit of $498 million the previous year. According to the Wall Street Journal, the company’s comparable operating profit fell 74% to $177 million. Analysts had forecasted earnings of $341 million and a net profit of $143 million, as reported by WSJ, based on FactSet data.
The company attributed its underperformance partly to a $136 million settlement related to a customer project issue, which has now been fully resolved, according to Hotard. Despite the challenging start, Nokia has maintained its profit outlook for 2025, projecting profits between $2.2 billion and $2.7 billion. However, Hotard, who has served as CEO for approximately three weeks, acknowledged that achieving the higher end of the forecast would be “more challenging.”
While Hotard informed Reuters that tariffs have not significantly reduced demand, he sees an opportunity to evaluate Nokia’s U.S. investments. The focus, according to Hotard, lies more on enhancing research, development, and manufacturing capabilities rather than relocating the company’s headquarters.
Hotard further told the Financial Times that he is open to considering the expansion of U.S. manufacturing to enhance resilience against tariffs. Nokia currently operates five manufacturing facilities in the United States. If such expansions could promote market growth, Hotard indicated he would consider strengthening U.S. manufacturing.
Several companies, including Chobani, Johnson & Johnson, Apple, and Abbott Laboratories, have increased their investments in the U.S. to mitigate the tariff impacts, according to CBS News.
