- Nokia's Q1 adjusted operating income was €281 million, beating forecasts of €244 million
- CEO Justin Hotard said the company is tracking above mid-point of full-year profit guidance
- AI and cloud orders reached €1 billion, driving growth beyond legacy mobile infrastructure sales
Nokia Oyj reported first-quarter adjusted profit that beat analyst forecasts, as the Finnish mobile network equipment maker's push into artificial intelligence and cloud infrastructure begins to pay off. Adjusted operating income was €281 million ($329 million) in the period, the Espoo, Finland-based company said in a statement on Thursday. That compares with an average analyst estimate of about €244 million, according to data compiled by Bloomberg.
The company “delivered a solid start to the year,” Nokia's Chief Executive Officer Justin Hotard said in the statement. The company is tracking “above the mid-point” of its full-year guidance for adjusted operating profit of €2 billion to €2.5 billion, he said.
Shares rose 8% to €9.19 at 10:46 a.m. in Helsinki on Thursday, the highest in 16 years.
While Nokia's legacy mobile infrastructure business accounted for the bulk of sales, much of the growth came from AI and cloud customers, said Hotard. The company booked €1 billion in orders from these clients during the quarter. Net sales were €4.5 billion for the period, compared with an analyst estimate of €4.6 billion.
The company streamlined its business late last year to focus on connecting data centers, banking on a global spending boom on AI to fuel sales. It had focused on supplying the backbone kit for mobile phone networks, an area that has stagnated in recent years as anticipated carrier spend on upgrades failed to materialize.
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Chipmaker Nvidia Corp. took a $1 billion equity stake in Nokia last year and will supply the company with AI-powered computers for wireless networks. Customer trials will launch later in 2026, with 10 clients committed to working with Nokia, said Hotard.
The quarter's earnings are the first under Nokia's new structure, and reflect the reorganization of its business into two units. Network Infrastructure comprises the AI data center connectivity arm, while Mobile Infrastructure encompasses its legacy mobile equipment business. It hived off most of its remaining, non-core arms into a portfolio businesses segment, while its defense business became a standalone incubation unit.
Sales for the Network Infrastructure division were $1.83 billion, slightly below analyst forecasts of $1.9 billion. Mobile Infrastructure sales were $2.5 billion, beating estimates.
Nokia's shares have almost doubled over the last year, driven by investor optimism around its AI pivot. Nokia expects rising uptake of AI agents, which can carry out tasks with minimal human intervention, and industrial AI applications, to boost demand, Hotard said in a media call. He said he expects a compound annual growth rate of 14% for the network infrastructure segment.
Though the Network Infrastructure unit grew slower than expected, Hotard is bullish on the business. Nokia has worked closely with prospective AI and cloud companies to design custom networking systems and expects repeat purchases, he said in an interview.
Hotard echoed warnings made by rival Ericsson AB last week about the rising cost of chips and longer lead times. Nokia will pass on those costs, and optimize product designs to keep expenditure down, he said. The company isn't seeing material impact from the US war with Iran, he added.
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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