By Gianluca Lo Nostro
(Reuters) -Finland’s Nokia reported third-quarter profit well ahead of expectations on Thursday, helped by strong optical and cloud demand, including sales to AI-driven data centers after its Infinera acquisition.
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 in July to issue a profit warning.
The company had lost ground in the North American telecoms market as U.S. carrier AT&T phases out Nokia’s 5G contract in favour of Nordic rival Ericsson, 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.
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 as Nokia said it will scale down passive investments.
Gains and losses from these funds will now be recorded under financial income and expenses instead of operating profit.
($1 = 0.8575 euros)
(Reporting by Gianluca Lo Nostro; Editing by Matt Scuffham and Milla Nissi-Prussak)
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