Nokia comparable profit rises 35%, beats forecasts as reported profit falls
Key Facts
Nokia's comparable operating profit rose 35% in the third quarter of 2026, beating analysts' forecasts, while reported operating profit fell and free cash flow turned negative, according to the company's results published on October 22. Comparable profit reached 605 million euros, up from 448 million euros in the third quarter of 2025, according to the earnings report. That exceeded an average forecast of 453 million euros in a company-compiled poll, Reuters reported. Comparable sales also rose 10% year on year to 5.15 billion euros during the quarter, according to the news agency. Sales topped the Nokia-compiled consensus estimate of 5.05 billion euros, with the company beating forecasts for both sales and comparable profit. Reported operating profit, meanwhile, stood at 196 million euros, according to Nokia's disclosure for the same period. That profit fell 22% from 252 million euros a year earlier, in contrast to the growth in comparable profit.
On liquidity, Nokia posted negative free cash flow of 99 million euros in the third quarter of 2026, according to its earnings report. That compares with positive free cash flow of 429 million euros in the same period of 2025. The company lowered its assumption for the conversion of comparable operating profit into free cash flow for 2026 to a range of 35% to 55%. The assumption published with its second-quarter results had ranged from 55% to 75%, before the revision announced with the new results. Nokia plans to commit an additional 400 million euros to working capital during the year to secure supplies and support growth opportunities, according to the report. The increase in working capital needs coincided with accelerated restructuring, which also contributed to the lower cash conversion assumption. The company raised its assumption for restructuring charges and costs associated with cost-saving programmes to 1.1 billion euros for 2026, from a previous assumption of 800 million euros, according to the results presentation.
By customer group, Nokia's sales to AI and cloud customers reached 631 million euros in the third quarter, up 123% year on year at constant currency, according to the fact sheet accompanying the results. The company added in its presentation that new orders from this customer group totalled 1.5 billion euros during the same period. Sales to communications service providers, meanwhile, were flat year on year at constant currency at 3.640 billion euros, according to the fact sheet. Geographically, combined sales in Europe, the Middle East and Africa totalled 2.152 billion euros, up 12% year on year at constant currency. By business, fixed networks sales fell 22% from the same period a year earlier at constant currency, according to the results presentation. Core network software sales also declined 13% on the same year-on-year, constant-currency basis. In optical products, Nokia announced design wins with 29 customers for its 800 gigabit-per-second pluggable optical modules as part of its third-quarter business update.
In the market, an update on the investor relations page showed Nokia's Helsinki-listed shares down 9.72% at 18:30 Finnish time on October 22, 2026. For the full year, the company maintained its comparable operating profit guidance range of 2.1 to 2.6 billion euros, expecting profit to exceed the midpoint of that range. Nokia expects its optical networks and IP networks businesses to grow by a combined 25% to 30% in 2027, according to the earnings report. On its business portfolio, the company plans to sell its enterprise campus edge business to Aurelius, according to its announcement of the deal. Nokia said in the announcement: "The planned transaction is expected to close in the first half of 2027, subject to customary closing conditions."