Finnish telecom gear maker Nokia reported on Thursday a smaller rise than expected in first-quarter comparable operating profit as sales tumbled when operators reduced spending on 5G technology.

Operating profit excluding certain items of income and expenses grew to 597 million euros from a year-earlier 479 million, helped by cost cuts as constant-currency sales fell 19%.

Four analysts polled by LSEG had on average forecast a comparable profit of 663 million euros.

CEO Pekka Lundmark said continued improvement in order intake despite weak markets should boost the second half of 2024.

“We remain confident in a stronger second half and achieving our full year outlook,” he said in a statement.

The company repeated an outlook announced in January for a comparable operating profit in 2024 of 2.3-2.9 billion euros. Nokia in January forecast a demand recovery in the second half of 2024.

Swedish rival Ericsson on Tuesday said its sales would normalise in the second half after a period of decline.

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Both companies have shed thousands of jobs and are cutting costs in response to weak sales of 5G gear amid sluggish demand in North America and slowing investments in India.

Nokia’s comparable gross margin grew to 48.6% from 37.7% in the first quarter.

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