Expects chip shortage to ease in second half of 2022
Q2 operating profit beats estimates
Net sales 5.87 bln euros vs est 5.60 bln euros
Says passing cost increases to all new contracts
Shares up as much as 7

STOCKHOLM, July 21 Reuters Finnish telecom equipment maker Nokia said it expects the global semiconductor shortage to ease later this year, as it reported quarterly operating profit that beat market expectations, boosted by solid demand for 5G gear.

The strong performancesent its shares up as much as 7.

A semiconductor shortage that began around the height of the pandemic in 2020 has affected a range of industries, including telecoms. Nokia said it expects the pressure to ease through the second half of 2022 and the first half of next year.

The overall direction in the semiconductor industry is positive at the moment, but we did continue to have constraints in the second quarter, Chief Executive Pekka Lundmark said in an interview.

Our order book would have enabled a faster growth had there been more components available.

Supplychain disruptions also led to increased costs, eroding margins, and forcing companies to increase prices.

Demand for chips is expected to fall later this year as smartphone and PC sales cool, increasing supply to other industries. 

While Nokia39;s margin fell slightly in the quarter, rival Ericsson39;s quarterly core earnings missed expectations. 

Following the margin warning last week from peer Ericsson, we think Nokia is…