Nokia's sales to AI customers more than double, but shares slip
Data centers powered Nokia's network business as sales to AI and cloud customers jumped 123% in the third quarter. Investors focused instead on a lower cash flow forecast.
Archive image · Photo: Pöllö / Wikimedia Commons, CC BY-SA 3.0 (cropped and resized)
Finnish network equipment maker Nokia said on Thursday that demand for AI infrastructure lifted its third-quarter results. Net sales rose 10% to 5.154 billion euros, or 9% at constant currency. Comparable operating profit climbed 35% to 605 million euros, for a comparable operating margin of 11.7%. According to TradingKey, analysts had on average expected sales of 5.06 billion euros and operating profit of 454 million euros.
Growth came mainly from the Network Infrastructure unit, where sales rose 17% to 2.158 billion euros. IP Networks grew 43% and Optical Networks 18%. Sales to AI and cloud customers rose 123%, and orders from that group rose 118%. "In AI & Cloud, net sales more than doubled year-over-year and we secured EUR 1.5 billion in new orders," Chief Executive Justin Hotard said. Nokia expects its combined optical and IP networks business to grow 25% to 30% in 2027.
The shares fell anyway. Finnish newspaper Kauppalehti, cited by Xinhua, reported they were down about 3% in Helsinki at midday, partly because of weaker cash flow. Nokia cut its forecast for 2026 free cash flow conversion, the share of profit it expects to turn into free cash flow, to 35%-55% from 55%-75%. It cited about 400 million euros of extra working capital, partly to secure supply for 2027. Accelerated restructuring and integration costs pushed reported operating profit down 22% to 196 million euros; Nokia now expects restructuring charges of 1.1 billion euros. Nokia kept its full-year outlook for comparable operating profit of 2.1 billion to 2.6 billion euros.