Key Takeaways
- Nokia stock declined nearly 15% despite IP Networks revenue surging 43% compared to the same quarter last year.
- AI and cloud revenue soared 123%, yet Nokia shares dropped almost 15% during Thursday’s trading session.
- Nokia’s comparable operating profit grew 35% while restructuring expenses reduced reported earnings.
- Nokia forecasts 25%-30% growth in Optical and IP Networks for 2027 amid the steep share price drop.
- Nokia captured €1.5 billion in AI and cloud customer orders while maintaining its 2026 financial guidance.
Nokia stock tumbled 14.97% to close at $7.86 even as the telecommunications equipment maker posted higher revenue and increased demand for artificial intelligence infrastructure. The Finland-based corporation delivered robust IP Networks expansion alongside elevated cloud client activity. Nevertheless, integration and restructuring expenses impacted reported earnings figures, and the firm held steady on its full-year 2026 financial projections.
Network Infrastructure Division Powers Revenue Expansion
Nokia posted EUR 5.15 billion in third-quarter sales, marking a 10% year-over-year increase. Revenue advanced 9% when adjusted for foreign exchange fluctuations, driven by heightened network infrastructure demand. The telecommunications vendor received additional orders from clients constructing networks for data center environments.
Network Infrastructure sales totaled EUR 2.16 billion, reflecting 15% growth on a constant currency basis. IP Networks within that division expanded 43%, while Optical Networks posted an 18% year-over-year gain. These solutions transport data across servers, data centers and other networking infrastructure.
Mobile Infrastructure generated EUR 2.90 billion in quarterly sales, climbing 5% versus the prior-year period. Certain fourth-quarter deliveries moved forward into the third quarter. The division also benefited from improved product portfolio mix, disciplined spending management and ongoing cost optimization initiatives.
Integration Expenses Weigh on Reported Operating Results
Nokia delivered EUR 605 million in comparable operating profit, climbing 35% year over year. Its comparable operating margin expanded to 11.7% from 9.5% in the previous year’s quarter. Sales growth combined with tighter cost management contributed to the margin expansion.
Yet reported operating profit declined 22% to EUR 196 million due to elevated restructuring and integration costs. The reported operating margin contracted to 3.8%, and reported gross margin fell to 42.2%. Comparable gross margin held relatively steady at 44.6%.
Comparable diluted earnings per share reached EUR 0.09, up from EUR 0.06 in the year-ago quarter. Reported diluted earnings from continuing operations came in at EUR 0.03 per share. Despite the lower reported operating performance, quarterly net income rose to EUR 156 million.
AI Customer Demand Fuels Future Growth Outlook
Revenue from AI and cloud clients jumped 123%, while order intake from these customers climbed 118%. Nokia booked EUR 1.5 billion in fresh quarterly orders from this customer segment. The company’s current backlog positions it to meet ongoing demand for high-bandwidth networking solutions.
Management anticipates combined Optical and IP Networks expansion of 25% to 30% during 2027. Nokia also plans to complete the Infinera acquisition integration by year-end, twelve months earlier than originally scheduled. The company expects EUR 200 million in net synergies from the Infinera combination.
Nokia is collaborating with Google on network connectivity related to Google’s EUR 13 billion Finnish investment program. Additionally, Nokia executed a live-network AI-RAN demonstration call with T-Mobile and NVIDIA. The telecommunications equipment provider left its full-year outlook unchanged following the sharp share price decline.
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