Nokia Corporation shares surged approximately 10% on both the U.S. (NYSE) and Helsinki (HEL) stock exchanges, following an earnings beat for the third quarter of fiscal year 2025.

Details

The company reported net sales growth of 12% year-on-year (Y/Y) to 4.82 billion euros ($5.65 billion), beating the analyst consensus estimate of $5.38 billion. 

The growth was mainly led by strong growth in the Optical Networks segment (+19% Y/Y).

Also Read: Nokia Strengthens Vodafone, Vodacom Alliance To Power Energy-Efficient 5G Networks

Comparable EPS came in at 6 euro cents (7 cents per share in dollars), compared to the analyst consensus estimate of 6 cents in dollars.

The comparable net income was 324 million euros, down 9% Y/Y, due to lower comparable operating profit (-10% Y/Y) and higher income tax expense.

Segment Performance

Network Infrastructure sales increased by 28% Y/Y, reflecting solid growth across all business divisions and contributions from the Infinera acquisition.

Cloud and Network Services sales increased by 8% Y/Y, driven by strength in broad-based business and particularly in Core Networks.

Nokia Tech sales climbed by 11% Y/Y, led by catch-up net sales related to agreements signed in the quarter.

On the other hand, Mobile Network sales fell by 1% Y/Y on declines in European business.

Margins

Comparable gross margin contracted 150 basis points Y/Y to 44.2% on unfavorable product mix in Network Infrastructure and Mobile Networks.

Operating margin on a comparable basis decreased 220 bps Y/Y to 9.0% in the quarter. Absent a one-time benefit from a prior-year provision reversal, the margin would have been flat compared to last year.

Other Key Metrics

Nokia ( NOK ) ended the quarter with 3 billion euros in net cash and 429 million euros in free cash flow.

The board proposed a dividend authorization of 0.14 euros per share.

On October 23, the board approved a dividend of 3 euro cents per share, payable on November 6, to shareholders of record on October 28.

Outlook

Nokia ( NOK ) has raised its fiscal 2025 profit outlook to 1.7 billion euros – 2.2 billion euros from 1.6 billion euros – 2.1 billion euros earlier.

Nokia ( NOK ) expects fourth-quarter sequential net sales growth (excluding Nokia Technologies) to slightly exceed the seasonally normal growth rate of 22% due to robust order trends.

For fiscal 2025, the company maintains its expectations for strong growth in Network Infrastructure, growth in Cloud and Network Services, and stable net sales in Mobile Networks.

Operating profit from Nokia Technologies is forecast to be around 1.1 billion euros for the full year.

The company reiterated its fiscal 2025 operational guidance unchanged and projects a cash conversion rate of 50%–80% of comparable operating profit.

At the Capital Markets Day in New York on November 19, Nokia ( NOK ) will outline its strategy to unlock the full potential of its portfolio and sharpen its focus on driving growth and operating leverage. CEO Justin Hotard said, “The AI supercycle is accelerating demand for providers of advanced and trusted connectivity. Nokia ( NOK ) is uniquely positioned to be a leader in this market.”

Investors can gain exposure to the stock via iShares U.S. Digital Infrastructure and Real Estate ETF and Defiance Connective Technologies ETF ( SIXG ) .

Price Action: NOK shares were trading higher by 7.21% to $5.950 premarket at last check Thursday. On HEL, shares were up 8.09%.

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