Nokia hailed a stronger performance in the second quarter of 2019 that was partly fueled by revenue from 5G equipment sales. The vendor also maintained its profit guidance for 2019 and 2020.

Raveev Suri, president and CEO of Nokia, was clearly relieved to be able to present a stronger set of results in Q2 following a weak first quarter when the Finnish vendor posted a loss.

“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.

However, he noted that risks remain in the year, including execution demands in the second half, trade-related uncertainty and challenges in the China market. “Given these risks, we will continue to focus on tight operational discipline, delivering on our €700 million [$782 million] cost-savings program, improving working capital management and advancing the implementation of our strategy,” Suri said.

Inderes analyst Mikael Rautanen told Bloomberg that although the second quarter result was “really good,” it “unfortunately can be attributed to strong swings from one quarter to the next. Pressure remains strong. Reaching full-year guidance will require a lot of work.”

Nokia itself conceded that the slow start to 2019 and weak overall first half “puts significant pressure on execution in the second half.” It also noted that the strong Q2 means that it is likely to see a softer Q3 (although not as bad as Q1, Suri added), but a particularly strong Q4.

In the second quarter, sales increased 7% year-on-year to $6.3 billion. Analysts had expected revenue of $6.1 billion, according to Reuters. The adjusted operating profit of $502 million compared with an average estimate of $338 million in a Bloomberg survey. The company still expects an adjusted operating margin of 9% to 12% for the full year 2019.

Nokia also upgraded its expectations for the overall market, saying it expected its primary addressable market to grow slightly in full-year 2019, and it expects continued growth in 2020. It had previously expected the addressable market to stay flat in 2019 and grow in 2020. It also expects to outperform the primary addressable market in 2019 and over the longer-term.

Some media commentary attributed Nokia’s improved results to the U.S. campaign against China’s Huawei Technologies, although the vendor does not comment publicly on its rivals.

Nokia has seen a notable pick-up in the area of 5G, and said it was able to recognize about half of the approximately $222 million in net sales related to 5G deliveries that it was unable to include in the Q1 revenue figure, with the remainder set to come in soon.

Suri also pointed out that all of Nokia’s current 4G customers that have decided on 5G have chosen Nokia for initial non-standalone (NSA) 5G new radio (5G NR) deployments, noting that with 5G NR NSA “it really does matter how good your 4G base is.”

One continuing area of concern is the vendor’s overall cash performance, which remains challenging. However, Suri said the company is confident it can turn that situation around. Nokia also saw an 11% decline in fixed network access sales as spending shifts away from traditional access equipment and expects a turnaround in this business to take some time.