TLDR
- Nokia stock climbed 11% after Q3 adjusted operating profit of €435 million beat analyst estimates of €324.2 million
- Revenue increased 12% to €4.83 billion, powered by 19% growth in Optical Networks from AI and data center customers
- Operating margin of 9% and gross margin of 44.2% both exceeded Wall Street forecasts
- Company raised full-year 2025 operating profit guidance to €1.7-€2.2 billion range
- Network Infrastructure sales jumped 28% while Mobile Networks and Nokia Technologies also posted revenue gains
Nokia delivered a strong third-quarter performance that sent shares soaring over 11% on Thursday. The Finnish telecom equipment maker reported adjusted operating profit of €435 million, crushing analyst expectations of €324.2 million.
Revenue for the quarter ended September climbed 12% to €4.83 billion. Wall Street had predicted around €4.6 billion.
The beat came despite a 10% year-over-year decline in adjusted operating profit. Currency headwinds from a stronger euro and weaker dollar pressured margins.
Optical Networks Powers Growth
The Optical Networks division delivered the standout performance. Sales in that segment surged 19% year over year on a constant-currency basis.
CEO Justin Hotard credited AI and data center customers for driving the optical network demand. These companies are expanding infrastructure to handle AI processing workloads.
Network Infrastructure as a whole benefited from the optical strength. Total division revenue reached €1.95 billion, up 28% from last year.
Gross margin hit 44.2% for the quarter. Jefferies analysts had forecast 43.4%.
Operating margin landed at 9%, beating the 7.4% consensus estimate. Diluted earnings per share came in at €0.06, matching expectations.
Order momentum remained strong. The book-to-bill ratio stayed above one in Optical and IP Networks, meaning more orders arrived than products shipped.
Business Unit Results
Cloud and Network Services revenue grew 8% to €645 million. Mobile Networks brought in €1.84 billion, a 4% increase year over year.
Nokia Technologies, the patent licensing division, posted €391 million in revenue. That marked an 11% gain from the prior year quarter.
For the nine-month period, Nokia reported total sales of €13.764 billion versus €13.236 billion last year. Net income dropped to €109 million from €457 million.
Nine-month earnings per share from continuing operations were €0.02, down from €0.17 in the same 2024 period.
Raised Guidance
Nokia lifted its full-year 2025 comparable operating profit outlook. The new range is €1.7 billion to €2.2 billion, up from the previous €1.6 billion to €2.1 billion range.
Management attributed the increase to a technical accounting change for venture fund investments. The company expects to reach the midpoint of the updated guidance range.
Jefferies kept its “hold” rating on Nokia with a €4.50 price target. That sits roughly 5% below Wednesday’s closing price of €4.73.
The firm noted Nokia’s results reflect ongoing strength in network infrastructure linked to AI investments. The healthy book-to-bill ratio suggests demand could extend into the fourth quarter.
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