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Finland's Nokia reported third-quarter profit well ahead of expectations on Thursday (Oct 23), helped by strong optical and cloud demand, including sales to AI-driven data centres after its Infinera acquisition. Comparable operating profit in the quarter through September reached €435 million (US$507 million). Analysts polled by LSEG expected the same metric to reach €342 million. US 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 US carrier AT&T phases out Nokia’s 5G contract in favour of Nordic rival Ericsson, which won a US$14 billion deal in 2023. However, quarterly group net sales rose 12 per cent to €4.83 billion, 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 per cent of group net sales and 14 per cent of Network Infrastructure sales, with Optical Networks up 19 per cent 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, 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.
