Nokia’s new CEO, Justin Hotard, is open to expanding the company’s U.S. manufacturing capabilities to mitigate the impact of tariffs introduced during President Donald Trump’s administration.
The company predicts tariffs will have an approximately $22 million to $34 million impact on its second-quarter comparable operating profit. The value of the Finnish telecommunications company’s shares dropped by 6% on Thursday following weak first-quarter earnings.
Nokia reported a $68.2 million net loss in its first quarter, compared to $498 million a year earlier. However, according to The Wall Street Journal, the company’s comparable operating profit plunged 74% to $177 million.
Meanwhile, analysts had previously expected the company to earn $341 million and a net profit of $143 million, WSJ reported, citing FactSet.
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The company pointed to a $136 million settlement as one reason for its lower-than-expected first-quarter numbers. Hotard said the settlement was related to a customer project issue that has now been entirely settled.
Despite its first-quarter performance, Nokia has not changed its outlook for 2025, in which it predicts a profit of $2.2 billion to $2.7 billion. However, Hotard — who has been CEO for about three weeks — admits that reaching the top end of the range will be “more challenging.”
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While Hotard told Reuters that he had not seen a significant dip in demand because of U.S. tariffs, the CEO does see an opportunity to assess Nokia’s U.S. investments.
“It is not a discussion on (moving) our headquarters… that is less critical than it is in terms of investment in research and development (R&D) and manufacturing capability,” Hotard told Reuters.
However, Hotard told the Financial Times (FT) that he would “absolutely entertain” the idea of expanding U.S. manufacturing to create “additional resiliency” to tariffs. The outlet reported that as of now, Nokia has five manufacturing facilities in the U.S.
“If there are opportunities to strengthen [U.S. manufacturing], in that it will help us drive growth in the market, that’s one of the things I’ll look at,” Hotard said, according to FT.
Several companies have started investing more in the U.S. to avoid major hits from tariffs. According to CBS News, the list of companies includes Chobani, Johnson & Johnson, Apple and Abbott Laboratories.
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