Nokia's AI and cloud sales more than doubled, and its networking unit grew 17%
Nokia said its Network Infrastructure sales rose 17% in the third quarter, helped by AI and cloud demand, and Reuters reported that comparable operating profit topped the average estimate.
By Marcus Rodriguez ·
For information only, not investment advice. Prices delayed.
Tickers: NOK
Nokia ($NOK) had a good quarter selling the plumbing behind AI. Sales in its Network Infrastructure unit, home to its IP and optical networking businesses, rose 17% on a reported basis in the third quarter, or 15% in constant currency, the company said. IP Networks grew 43% and Optical Networks 18% in constant currency, while Fixed Networks fell 22% as Nokia steers toward higher-margin products.
The number to watch is the customer mix: group sales to AI and cloud customers grew 123% in constant currency, and orders from them rose 118%. Nokia said optical growth was led by the Americas, and IP sales rose in every region, with particular strength in the Americas. It also credited telecom providers and, in IP, enterprise customers.
The profit line beat. Comparable operating profit, which strips out items like restructuring costs, rose to 605 million euros from 448 million a year earlier, above the 453 million euro average estimate in a company-provided poll, Reuters reported. Comparable net sales came in at 5.15 billion euros against a 5.05 billion consensus. The footnote: the reported operating margin fell to 3.8% from a year earlier because of restructuring and integration costs, even as the comparable margin rose to 11.7%. Mobile Infrastructure's 5% growth was partly revenue pulled forward from the fourth quarter.
Nokia kept its full-year outlook unchanged, while nudging up its assumption for combined optical and IP growth this year to "somewhat above" its prior 18% to 20%. Chief executive Justin Hotard went further, in a forecast rather than a result: "We expect our combined Optical and IP Networks businesses to grow between 25% and 30% in 2027."
Nokia's US-listed shares closed at $9.25, up 2.55%, as of Oct 21, 4:00 PM ET, before the results came out.
Sources
Tags: earnings · ai · europe · guidance