Nokia reports fourth quarter in line with expectations
By Josh White
Date: Thursday 29 Jan 2026
(Sharecast News) - Nokia reported fourth-quarter results in line with expectations on Thursday, as growth in network infrastructure tied to AI and cloud demand helped offset ongoing restructuring costs and mixed performance elsewhere, while the update also landed alongside news that chair Sari Baldauf planned to step down.
Comparable net sales rose 3% year-on-year on a constant-currency and portfolio basis to €6.1bn in the fourth quarter, while reported net sales increased 2% to €6.125bn.
Comparable gross margin improved 90 basis points to 48.1% on a stronger product mix, though the reported gross margin fell to 44.9% as restructuring-related charges rose.
Comparable operating profit eased slightly to €1.06bn, leaving the comparable operating margin at 17.3%, while reported operating profit dropped to €540m and the reported operating margin fell to 8.8%.
Comparable diluted EPS was 16 euro cents and reported diluted EPS was 10 euro cents, with free cash flow of €0.2bn and a net cash balance of €3.4bn.
Network infrastructure drove much of the quarter's growth, with comparable net sales up 7% and optical networks up 17%, as Nokia said order intake remained strong across optical and IP networks and book-to-bill stayed above one, supported by demand from AI and cloud customers.
Mobile networks grew 6% in the quarter, while cloud and network services slipped 4% and Nokia Technologies declined 14% on a constant-currency and portfolio basis, reflecting a lower contribution from that licensing-led segment versus a year earlier.
Chief executive Justin Hotard said Nokia was investing "with a long-term view" as AI expanded network requirements beyond data centres, and highlighted progress in optical, data-centre switching and the group's Nvidia partnership.
For the full year, Nokia reported net sales up 3% to €19.889bn, or 2% growth on a constant-currency and portfolio basis.
Comparable operating profit was €2.024bn, within prior guidance, and free cash flow was €1.5bn, implying 72% free-cash-flow conversion, although reported operating profit fell to €885m amid higher restructuring and other charges.
Nokia's board proposed authorisation for distributions of up to 14 euro cents per share for 2025, and the company also confirmed a three euro cents per share dividend for February.
Looking to 2026, Nokia introduced guidance for comparable operating profit of €2bn to €2.5bn and said it expected network infrastructure net sales growth of 6% to 8%, with higher capital expenditure largely tied to added manufacturing capacity to support optical growth.
Nokia also flagged that first-quarter 2026 seasonality was expected to be weaker than usual, with net sales declining more than the historical pattern outside Nokia Technologies.
Strategically, Nokia pointed to the integration of Infinera as part of its push deeper into optical networking for AI-era infrastructure, and said it took full ownership of its Nokia Shanghai-Bell joint venture in China in the fourth quarter, a move that contributed to a €0.5bn net cash outflow in the period.
Reuters reported that Baldauf planned to step down as chair, with Nokia proposing vice chair Timo Ihamuotila as her successor.
At 1306 EET ( 1106 GMT), shares in Nokia were down 5.26% in Helsinki at €5.36.
Reporting by Josh White for Sharecast.com.
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