Nokia's profits slide considerably in Q2

Nokia's net sales declined and operating profit dropped sharply in the second quarter of 2016, the Finnish telecom company announced on Thursday.

Nokia's net sales stood at 5.68 billion euros(6.32 billion U.S. dollars) in the second quarter, decreasing 11 percent compared with the same period in 2015, and its operating profit was 332 million euros, falling remarkably by 49 percent.

Nokia said that the decline in both the net sales and the operating profit was attributed mainly to the poor performance of Networks business.

Nokia Networks' net sales fell by 11 percent to 5.23 billion euros in the second quarter, and its operating profit plunged by 39 percent from 511 million euros to 312 million euros.

The results were even worse than the expectations made by analysts.

Earlier, a Reuters poll of analysts forecasted that from April to June, Nokia's net sales was expected to be 5.8 billion euros, which would have reduced by 8 percent on year-on-year basis, and its operating profit would have been 397 million euros, dropping by 39 percent.

"The decline of our top line remains a concern, and reflects challenging market conditions," commented Rajeev Suri, President and CEO of Nokia.

Suri added that Nokia did not expect those conditions to improve in the near future. However, he believed that the company was well-positioned given the scope of its portfolio and opportunities in the evolution from 4G to 5G.

Nokia expected its net sales and profitability would be improved slightly in the third quarter this year, as a result of the ongoing cost saving efforts.

Mikael Rautanen, a technology analyst from a Finnish analysis company, told Finnish national broadcaster Yle Nokia's poor performance was a result of weakened market situation, particularly in wireless networks.

He said the operators' investments were currently at a standstill in almost all markets.

Nokia's cost-saving measures could somehow hit the Finnish economy, according to Rautanen. Enditem