Nokia comparable profit rises 35% as AI and cloud sales surge
Key Facts
Nokia's comparable operating profit rose 35% in the third quarter of 2026 to 605 million euros from 448 million euros in the same period a year earlier, according to its financial report. The earnings improvement coincided with group sales growth of 9% year on year at constant currency and a surge in sales to AI and cloud customers. Sales to this customer group reached 631 million euros during the quarter, up 123% year on year at constant currency, according to the results sheet published by the company. Nokia also booked 1.5 billion euros in new orders from AI and cloud customers, according to its earnings presentation. By business, IP Networks sales rose 43% at constant currency compared with the same period a year earlier. Optical Networks sales grew 18% on the same basis, according to the company. By contrast, Fixed Networks sales fell 22% at constant currency during the quarter.
Reported operating profit, however, moved in the opposite direction to comparable profit, falling to 196 million euros in the third quarter, according to the financial report. The company had posted reported operating profit of 252 million euros in the same period of 2025. The measure fell 22% year on year, coinciding with an increase in restructuring and associated charges. These charges reached 357 million euros in the third quarter of 2026, according to the results table. That compares with 44 million euros in the corresponding quarter a year earlier. Restructuring charges, alongside other items excluded from the comparable measure, explain the gap between reported and comparable operating profit.
The pressure extended to cash flow, with Nokia reporting negative free cash flow of 99 million euros in the third quarter, according to its financial report. It had generated positive free cash flow of 429 million euros in the same period a year earlier. For the full year 2026, the company lowered its assumption for the conversion of comparable operating profit into free cash flow to between 35% and 55%, according to its earnings presentation. The previous conversion range was between 55% and 75% in the outlook published with its second-quarter results. Alongside the adjustment to its cash conversion assumption, Nokia maintained its outlook for comparable operating profit in 2026 at between 2.1 billion and 2.6 billion euros.
As part of changes to its business portfolio, Nokia agreed to sell its Enterprise Campus Edge business to Aurelius, according to the transaction announcement. The unit serves around 900 private wireless network customers globally, according to the statement. The company expects the sale to close in the first half of 2027, subject to customary closing conditions. On the integration of Infinera, Nokia is targeting savings of 200 million euros by the end of 2026, according to its earnings presentation. For the fourth quarter of 2026, the company assumes sales will increase between 20% and 24% compared with the third quarter. Nokia said in its financial report on the outlook for the following year: "We expect our Optical Networks and IP Networks businesses combined to grow between 25% and 30% in 2027." It is scheduled to announce fourth-quarter and full-year 2026 results on January 28, 2027.