Nokia today reported mixed financial results during its first quarter in 2020, including a $200 million slide in revenue attributed to supply chain disruptions due to the pandemic.

The company maintains that sales will increase in the second half of the year, but warned that the biggest challenges from the coronavirus outbreak will hit during the current quarter. 

“We expect the majority of this COVID-19 impact to be in Q2 and believe that our industry is fairly resilient to the crisis, although not immune,” CEO Rajeev Suri said. 

“We did not see a decline in demand in the first quarter. As the COVID-19 situation develops, however, an increase in supply and delivery challenges in a number of countries is possible and some customers may reassess their spending plans,” he said. 

The company pinned its Q1 supply-chain issues on its operations in China, but said its new series of radios and software for 5G networks is gaining momentum. The vendor’s second-generation radio access network (RAN) gear is part of the company’s push to lower costs and boost performance with a new system-on-a-chip (SoC). 

The new equipment comprised 17% of its 5G shipments during the quarter, and the company said it remains on track to boost that number to 35% by the end of 2020, 70% by the end of 2021, and all 5G shipments by the end of 2022.

Nokia reported a net loss of $128 million and a 2.4% year-over-year decline in revenues of $5.37 billion during the quarter. The company also reported 70 5G commercial deals and 21 live 5G networks as of today.

Nokia’s closest and longtime competitor Ericsson closed the quarter with 86 commercial 5G contracts and 29 live 5G networks. Ericsson also reported a 2% year-over-year increase in sales, claiming that it encountered “very limited impact from COVID-19” during the quarter. 

But like Nokia, Ericsson warned that the current quarter is “likely to be a tad softer than normal” due to the pandemic. Both vendors also said 5G rollouts in Europe could be delayed due to the coronavirus.

Market leader Huawei reported a dramatic decrease in revenue growth during the quarter, posting a 1.4% year-over-year increase in revenue compared to a 39% increase the year prior. 

The tempered results from Nokia come amid other challenges, changes to its executive ranks, and a reported hostile takeover attempt earlier this month. Suri, last month, announced he will be leaving his position on Aug. 31, and Chairman Risto Siilasmaa left his role at the end of March. 

Suri and his team are trying to improve the company’s outlook before he hands the reins over to Pekka Lundmark, who currently serves as president and CEO of Fortum, an energy company also headquartered in Espoo, Finland. 

The company’s research and development efforts are continuing amid lockdown restrictions and the roadmaps have not been impacted, he said, adding that some software releases are ahead of schedule. Nokia slashed its profit outlook through 2020 last October, cut about 5,000 jobs during 2019, and hinted at more to come.