(Bloomberg) -- Nokia Oyj said that it’s passed a low point for the year after reporting sales that missed estimates and forecasting a stronger second half. 

Net sales declined 19% to €4.67 billion ($5 billion) in the quarter from a year earlier, the Espoo, Finland-based company said in a statement on Thursday. That missed analysts’ €4.96 billion forecast, according to the average of estimates compiled by Bloomberg. 

Investors are watching for demand to pick up later this year at Nokia and its Swedish rival Ericsson after their telecom service provider customers held back spending on mobile networks. The telecom equipment companies have cut thousands of jobs and restructured their businesses to prop up profitability while they wait for growth to return. 

The first quarter “went so low in terms of delivery volumes that we do expect that that was kind of the low point of the cycle, and then we would start gradually seeing volumes picking up quarter after quarter from from here,” Chief Executive Officer Pekka Lundmark said in an interview after the results. “It does not change the fact that as a whole 2024 will still be a weak year for mobile networks.”

Read More: Ericsson Beats Estimates as Restructuring Begins to Pay Off 

Nokia’s adjusted operating profit rose 25% in the first quarter from a year earlier to €597 million, helped by a series of patent deals. That compared to the €568.8 million average forecast from analysts surveyed by Bloomberg. 

Nokia shares rose 1.5% to €3.21 at 11:02 a.m. in Helsinki. The stock had gained 5% this year. 

The “green shoots” that Nokia saw in the fourth quarter have continued particularly in the network infrastructure and software businesses, Lundmark said. The company expects other units including optical networks and IP routing could see a pick-up later in the year, he said. The network infrastructure business should return to sales growth this year, Nokia said in the statement.

The operating profit margin at the company’s network infrastructure business was the “biggest disappointment” this quarter, Inderes analyst Atte Riikola said in a note to investors. The unit’s operating margin fell to 4.9% in the first quarter from 15% a year ago. 

“As a whole, the softness of the beginning of the year piles more pressure on the end of the year, and it appears we’ll be kept in suspense until the end of the year on whether Nokia can hold onto its guidance,” Riikola wrote. The company said it’s still on track to meet its operating profit estimates for the year of €2.3 billion to €2.9 billion.

Nokia is undergoing major cuts to its workforce, with plans to eliminate as many as 14,000 jobs by the end of 2026. Lundmark said the company is “proceeding rapidly” with its plans and “the payoff is starting to be visible already this year.” There are no plans to cut additional jobs, he said. 

Nokia, which once sold mobile phones that competed with the iPhone, also got some relief from resolving patent disputes during the quarter. In February, the company announced a multi-year deal with Chinese phonemaker Vivo that will yield royalties as well as back payments covering the years-long dispute between the two companies. That came just weeks after Nokia struck a deal with Oppo, another Chinese mobile phonemaker, and was the sixth licensing deal Nokia struck in a little more than a year. 

The company isn’t expecting significant license renewals for “a number of years” after this cycle and will focus on new areas of growth, Nokia said.

--With assistance from Kati Pohjanpalo and Henry Ren.

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