Nokia Oyj reported higher first-quarter profit than analysts expected and the telecom network equipment maker said it expects its struggling network infrastructure business to return to sales growth for the full year. 

Adjusted operating profit rose 25% in the first quarter from a year earlier to €597 million helped by a series of patent deals, the Espoo, Finland-based company said in a statement on Thursday. That compared to the €568.8 million average forecast from analysts surveyed by Bloomberg. The company also confirmed its full-year outlook.

Order intake is improving and is expected to pick up in the second half of the year, making the first quarter the “low point” in demand, Nokia said. Better sales combined with the company’s cost-cutting measures announced last year have put the company on track to meet its operating profit estimates for the year of €2.3 billion to €2.9 billion.

Nokia and its Swedish competitor, Ericsson, have been enduring declining sales while they wait for telecommunications companies in Europe and US to restart network upgrades. Ericsson’s chief executive officer said in January that network investment levels had become “unsustainably low.” 

Nokia shares fell 0.5% to €3.16 in Helsinki on Wednesday. The stock had gained 3.5% this year. 

Ericsson, which said last month that it would eliminate 1,200 jobs in Sweden after announcing plans to cut 8% of its workforce last year, reaped the benefits of its restructuring in the first quarter. While first-quarter adjusted earnings before interest and taxes fell significantly, the profit measure was about twice what analysts were expecting. 

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 licencing deal Nokia struck in a little more than a year. 

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

  - Bloomberg