Nokia (NOK) Stock: Q4 Sales Rise But 2026 Guidance Disappoints Investors

TLDR

• Nokia posted Q4 2025 net sales of €6.1 billion, up 3% year-over-year on a constant currency basis, with growth driven by Network Infrastructure and Mobile Networks
• Network Infrastructure sales jumped 19% in Q4, powered by strong demand from AI and cloud data center customers, with Optical Networks growing 17%
• The company reported Q4 comparable operating profit of €1.06 billion with a 17.3% margin, down slightly from €1.09 billion in Q4 2024
• Nokia issued 2026 guidance targeting comparable operating profit of €2.0-€2.5 billion, below analyst consensus expectations of €2.37 billion
• Shares dropped 5.8% in early European trading as investors reacted to the softer-than-expected forward guidance

Nokia delivered mixed results for its fourth quarter of 2025, posting sales growth driven by AI and cloud customers but offering guidance that fell short of Wall Street expectations. The Finnish telecom equipment maker saw shares tumble 5.8% in early European trading following the announcement.

The company reported fourth quarter net sales of €6.1 billion. This marked a 3% increase year-over-year on a constant currency basis. The figure came in line with the company’s own expectations and slightly beat the FactSet analyst estimate of €6.11 billion.

Nokia Oyj, NOK

CEO Justin Hotard’s strategic pivot toward AI and data center markets showed clear results in the quarter. The Network Infrastructure division posted 19% sales growth, driven by surging demand from AI and cloud customers. Optical Networks, a key component of data center connectivity, grew an impressive 17%.

The company’s comparable operating profit for the quarter reached €1.06 billion. This represented a modest decline from €1.09 billion in the same period last year. The comparable operating margin slipped 90 basis points to 17.3%, which Nokia attributed to growth investments in Network Infrastructure, including the integration of recently acquired Infinera.

Mobile Networks Shows Stabilization

The Mobile Networks division, which serves traditional telecom operators, saw sales decline 1.7% year-over-year. Growth in the Middle East, Japan, and Indonesia couldn’t offset lower sales in North America. However, the business showed signs of stabilization with gross margins improving to 40.1% from 37.3%.

For the full year 2025, Nokia achieved 2% net sales growth on a constant currency basis. The company generated comparable operating profit of €2.0 billion and free cash flow of €1.5 billion. Comparable diluted earnings per share for Q4 came in at €0.16, while reported diluted EPS was €0.10.

Guidance Triggers Sell-Off

The market reaction centered on Nokia’s 2026 outlook. The company guided for comparable operating profit between €2.0 billion and €2.5 billion. The midpoint of €2.25 billion fell about 5% below the analyst consensus of €2.37 billion, according to J.P. Morgan.

Nokia expects Network Infrastructure net sales to grow 6-8% in 2026. This aligns with the company’s long-term targets. However, the company warned that first-quarter sales would decline somewhat more than the normal seasonal pattern, with operating margins only slightly higher than the prior year.

The company posted group comparable net profit attributable to shareholders of €880 million for the fourth quarter. This represented an 11% decline but beat analyst expectations of €834 million. Nokia ended the quarter with a net cash position of €3.4 billion after taking full ownership of its joint venture in China, which resulted in a €0.5 billion net cash outflow.

Nokia’s board proposed a dividend authorization of €0.14 per share for 2025. The board also announced leadership changes, with Chair Sari Baldauf stepping down and board member Timo Ihamuotila proposed as the new chair. Meredith Whittaker, president of Signal Technology Foundation, is proposed for election as a new board member.

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