Nokia Q3 lifted by AI but profit hit by charges

Nokia (NOK) delivered higher underlying profitability in the third quarter of 2026, as comparable operating profit rose to €605 million from €448 million a year earlier. Comparable net sales increased to €5,154 million, representing 10% year-on-year growth on a reported basis and 9% at constant currency. The comparable operating margin reached 11.7%, reflecting improved performance across key parts of the business. These figures highlight a solid quarter for the company on an adjusted basis despite headwinds in reported earnings.

The improvement in comparable earnings came alongside growth across Nokia (NOK)’s business portfolio. Network Infrastructure net sales climbed 15% year-on-year, led by particularly strong advances in IP Networks, which grew 43%, and Optical Networks, which increased 18%. This momentum in infrastructure helped underpin the group’s overall revenue expansion in the period.

A key driver of Nokia’s third-quarter performance was accelerating demand from AI and cloud customers. Group net sales to this customer segment grew 123% year-on-year, indicating a sharp increase in spending on networking and related infrastructure. Order intake from AI and cloud customers rose 118%, reaching €1.5 billion in the quarter, pointing to a strong near-term pipeline.

The surge in orders and sales from AI and cloud customers is closely linked to rising investment in data center networking equipment. This demand supported Nokia’s results in the quarter and contributed to the growth seen in its Network Infrastructure activities, particularly in IP and optical products used in data center and cloud connectivity.

Despite the improvement in comparable metrics, Nokia’s reported operating profit declined in the third quarter of 2026. Reported operating profit fell 22% to €196 million, with the reported operating margin at 3.8%. The gap between reported and comparable profit reflects significant restructuring-related items booked in the period.

Nokia recorded €357 million of restructuring-related charges in the quarter, which weighed on reported earnings. These costs were linked to restructuring and integration efforts and were the main factor behind the lower reported profitability compared with a year earlier, even as operational performance improved on an adjusted basis.

Alongside its third-quarter results, Nokia reaffirmed its full-year 2026 comparable operating profit outlook, describing its overall financial guidance as maintained. The company indicated that the trends seen in the third quarter, particularly in AI and cloud-driven demand, support its existing expectations for the year.

Nokia also signaled an anticipated step-up in activity in the final quarter of the year. It expects fourth-quarter sales to rise 20%–24% sequentially, implying a stronger revenue contribution from ongoing orders and backlog deliveries. This guidance suggests that momentum in key segments such as Network Infrastructure and AI- and cloud-related projects is expected to continue into the year-end period.