Item 1 of 3 A screen displays the company logo for Nokia Corporation on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 24, 2023. REUTERS/Brendan McDermid
[1/3]A screen displays the company logo for Nokia Corporation on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 24, 2023. REUTERS/Brendan McDermid Purchase Licensing Rights, opens new tab
- Nokia beats Q3 earnings estimates
- Sales ahead of expectation as AI boosts optical revenue
- Shares hit their highest since 2022
Oct 23 (Reuters) – Nokia (NOKIA.HE), opens new tab reported third-quarter profit which was ahead of market expectations on Thursday, driven by strong optical and cloud demand, including AI-focused data centre sales following its Infinera acquisition.
The company’s shares were up 10.6% to 5.2 euros by 0717GMT, their highest in over three years, adding 3 billion euros to the company’s 30-billion-euro market value.
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Comparable operating profit in the quarter through September reached 435 million euros ($507 million). Analysts polled by LSEG expected the same metric to reach 342 million euros.
U.S. tariffs, a market slowdown and a weaker dollar had weighed on Nokia’s business this year, prompting it to issue a profit warning in July.The company had lost ground in the North American telecoms market as U.S. carrier AT&T (T.N), opens new tab phases out Nokia’s 5G contract in favour of Nordic rival Ericsson (ERICb.ST), opens new tab, which won a $14 billion deal in 2023.
However, quarterly group net sales rose 12% to 4.83 billion euros, above the 4.6 billion forecast, helped by strong growth in Optical Networks and cloud services.
The Finnish telecom kit maker is overperforming its Swedish rival Ericsson, underscoring contrasting investor sentiment toward the two Nordic telecom equipment makers this year.
Nokia said artificial intelligence and cloud customers accounted for 6% of group net sales and 14% of network infrastructure sales, with optical networks up 19% on a constant currency basis.
Mobile networks remain Nokia’s core business, but the company has been investing in AI, including its recent acquisition of U.S. optical networking firm Infinera.
“AI and data center demand continues to be robust. In fact, it continues to accelerate from our perspective,” chief executive Justin Hotard said in a call with reporters.
The Finnish company expects annual operating profit between 1.7 billion and 2.2 billion euros, a slight upgrade to the previous range of up to 2.1 billion. It had previously said the second half of 2025 would be stronger than the first.
The slight revision is linked to a change in how it reports venture fund results after Nokia said it will scale down its passive investments.
($1 = 0.8575 euros)
Reporting by Gianluca Lo Nostro; Editing by Matt Scuffham and Milla Nissi-Prussak
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