Finnish networking gear firm Nokia reported an unexpected profit boost in the second quarter of this year, following increased demand for its 5G equipment, the company announced on Thursday.
The company's profits in Q2 increased by more than a third to 451 million euros, while revenues increased to 5.7 billion euros, which was an improvement over Q2 of last year, when the firm posted 5.3 billion euros in revenue and profit losses of 42 percent.
The firm's president and CEO, Rajeev Suri, said he was pleased with the company's performance.
"Nokia delivered a strong second quarter, driven by 5G demand, a competitive end-to-end portfolio and strengthened operational execution. Given these compelling results, we are confirming our full-year 2019 guidance," Suri said in a statement issued Thursday.
The term 5G refers to developing fifth-generation cellular network technology which, among other things, is significantly faster and has higher capacities than current networks like 4G and LTE.
However, Nokia presented its results in a non-IFRS (International Financial Reporting Standards) format. IFRS are standards that make global firms' results understandable and comparable across national boundaries.
If presented in the IFRS format, Nokia's Q2 results would have shown losses of 57 million euros. The company said the non-IFRS results were better at describing the company's development.
But regardless of the format used, the firm's quarterly earnings improved compared to Q2 of last year.
Several companies sell 5G hardware, including Nokia, Ericsson, Huawei, ZTE and Samsung, among others.
Chinese firm Huawei, Nokia's biggest rival in the mobile networks sector, has recently come under pressure over security concerns. The US and other countries have warned against using Huawei gear, which has led to speculation that Nokia and other 5G players may have an opportunity to increase their market share as countries around the world roll out the new network technology.
Nokia considers Ericsson and Huawei as their biggest rivals, according to Reuters news service.
Reuters also reports that Suri said demand for the company's 5G tech was strong in lead markets, including the US and Korea, and that 5G markets are beginning to open up in the Middle East, Japan, China, the Nordic countries, Italy and the UK.
"In the quarter, we saw good year-on-year growth, meaningful improvements in profitability, robust progress in our strategic expansion areas of software and enterprise and excellent momentum in our IP routing business. We also continued to enhance our position in 5G, and now have 45 commercial 5G deals and nine live networks," Suri said.