Nokia Comparable Operating Profit Jumps 35% to EUR 605 Million, Beating the Company Poll as AI and Cloud Sales More Than Double

Nokia reported third-quarter 2026 results on Thursday, Oct. 22, with comparable operating profit of EUR 605 million, up 35% from EUR 448 million a year earlier and well above the EUR 453 million average estimate in a company-provided poll, as group net sales to AI and cloud customers grew 123% year over year.

The quarter therefore carries two profit stories that must not be merged. On the comparable basis Nokia uses for its outlook, operating profit rose 35% and the comparable operating margin widened 220 basis points to 11.7% from 9.5%. On the reported basis, operating profit fell 22% to EUR 196 million and the reported operating margin narrowed 160 basis points to 3.8%, which the company attributed to accelerated restructuring and integration cost. Both lines are in the same interim report, and the distance between them is the cost of the restructuring Nokia is running while it chases AI infrastructure demand.

AI and cloud demand did the heavy lifting

The growth engine was explicit. Group net sales to AI and cloud customers grew 123% year over year, and order intake from those customers rose 118% to EUR 1.5 billion. Within Network Infrastructure, IP Networks sales grew 43% and Optical Networks sales grew 18%. Chief executive Justin Hotard said the company secured EUR 1.5 billion in new orders from AI and cloud customers and pointed to its partnership with Google in support of a EUR 13 billion investment in Finland as an example of the connectivity AI infrastructure requires. Net sales overall were EUR 5.15 billion, up 10% reported and up 9% on a constant currency basis, ahead of the EUR 5.05 billion company-provided consensus. Comparable gross margin was 44.6%, down 20 basis points from 44.8% a year earlier, so the profit beat came mainly from volume and operating efficiency rather than a richer gross margin.

The reported line, kept separate

Reported results show why the headline figure needs its label. Reported net profit for the period was EUR 156 million, up 95% from EUR 80 million a year earlier, and reported profit from continuing operations was EUR 176 million, up 96%. Reported diluted earnings per share from continuing operations were EUR 0.03, against comparable diluted earnings per share of EUR 0.09, up 50% from EUR 0.06 a year earlier. Comparable profit from continuing operations was EUR 498 million, up 49%. The reported operating line moved the other way because restructuring and integration charges are excluded from the comparable measures but are real costs in the reported accounts. Readers should treat EUR 605 million as the comparable operating result and EUR 196 million as the reported operating result, not as rival estimates of the same number.

Network infrastructure led the segments

By segment, Network Infrastructure net sales were EUR 2.16 billion, up 17% reported and 15% on a constant currency basis, with operating profit of EUR 216 million and an operating margin of 10.0%, up from 7.7% a year earlier. Mobile Infrastructure net sales were EUR 2.9 billion, up 5%, with operating profit of EUR 420 million and a margin of 14.5%, up from 12.9%; Nokia said mobile sales benefited in part from revenue accelerating from the fourth quarter into the third, plus product mix, commercial discipline and the cost reduction program. Portfolio Businesses net sales were EUR 96 million, down 1%, with operating profit of EUR 3 million against a loss a year earlier. The segment split supports the strategy claim: the fastest growth and the sharpest margin gain sat in the infrastructure businesses selling into data center and AI demand, not in the legacy mobile base.

Outlook held, and a new 2027 guide added

Nokia maintained its full-year 2026 outlook for comparable operating profit of EUR 2.1 billion to EUR 2.6 billion, based on a euro to dollar rate of 1.14 for the remainder of 2026. It also gave a new forward guide: Hotard said the combined Optical and IP Networks businesses are expected to grow between 25% and 30% in 2027. The Infinera integration is on track to complete by the end of 2026, one year ahead of the original plan, with EUR 200 million of net synergies. One offset sits in the cash assumptions: Nokia lowered its free cash flow conversion assumption to 35% to 55% of comparable operating profit because it is investing in working capital to secure supply and support the 2027 growth opportunity, including an additional EUR 400 million of working capital this year, alongside accelerated restructuring. For the fourth quarter, Nokia assumes net sales rise 20% to 24% from the third quarter, with a typically strong increase in comparable operating profit needed to deliver the full year above the midpoint of the outlook range. The board also resolved a dividend of EUR 0.03 a share, with a record date of Oct. 27, 2026 and payment on Nov. 5, 2026.

What the beat does and does not prove

"Overall, growth is accelerating, operating leverage is becoming more visible and I’m confident in the long-term shareholder value Team Nokia is creating," Hotard said. The evidence for the first half of that sentence is in this print: sales growth accelerated, AI and cloud orders more than doubled, and the comparable margin expanded. What the print does not yet prove is conversion: whether the EUR 1.5 billion of AI and cloud orders turns into 2027 revenue at the guided 25% to 30% growth rate for Optical and IP Networks, whether the working-capital investment unwinds into cash, and whether reported profit converges with the comparable line as restructuring charges fade. Nokia's shares were up 48% year to date before the print, so expectations were not low. The next test is the fourth quarter the company has just described in unusually specific terms, and then the full-year report on Jan. 28, 2027.