Nokia comparable profit rises 35%, beats forecasts as cash conversion outlook cut
Key Facts
Nokia's comparable operating profit rose 35% in the third quarter of 2026, beating analysts' expectations, while the company lowered its assumption for profit conversion into free cash flow for the current year. Nokia said in its earnings report that comparable operating profit reached 605 million euros, against 448 million euros in the same period of 2025. The result exceeded an average forecast of 453 million euros in a company-compiled poll, according to Reuters. Comparable diluted earnings per share rose to 0.09 euros from 0.06 euros a year earlier, according to the results statement. However, reported operating profit fell to 196 million euros from 252 million euros in the third quarter of the previous year. Reported profit declined 22% year on year, in contrast to the growth in comparable profit. On the business outlook, the consensus estimate for third-quarter sales compiled by Nokia stood at 5.05 billion euros, according to Reuters.
Free cash flow showed an outflow of 99 million euros in the third quarter, against an inflow of 429 million euros a year earlier, according to the company's report. Nokia lowered its assumption for the conversion of comparable operating profit into free cash flow in 2026 to a range of 35% to 55%. The previous assumption, published with second-quarter results, was 55% to 75%. The company attributed the revision to investments to secure supplies, alongside accelerated restructuring. It plans to allocate an additional 400 million euros to working capital during the year to secure supplies and support future growth. It also raised its assumption for restructuring-related cash payments to between 800 and 900 million euros. The previously estimated range for these payments was between 700 and 800 million euros, according to the company's results presentation.
Sales to AI and cloud customers reached 631 million euros in the third quarter, according to Nokia's results statement. These sales grew 123% year on year at constant currency. The company added in its results presentation that new orders from AI and cloud customers totalled 1.5 billion euros during the period. Across its network businesses, 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, while Fixed Networks sales fell 22%. In the second quarter of 2026, orders from AI and cloud customers had totalled 2.8 billion euros, according to the report for that period. Management said at the time: "We expect around half of these orders to convert into revenue over the following twelve months."
For the current year, Nokia maintained its comparable operating profit forecast at a range of 2.1 to 2.6 billion euros, according to the earnings report. The chief executive expects the Optical Networks and IP Networks businesses to grow by a combined 25% to 30% in 2027, according to Reuters. In an upcoming change to its business portfolio, the company expects to complete the sale of its Enterprise Campus Edge business to Aurelius in the first half of 2027. Completion remains subject to customary closing conditions, according to Nokia's sale announcement. The company plans to publish its fourth-quarter and full-year 2026 results on 28 January 2027.