Nokia's Cash Machine Slows Even as the Sales Engine Roars
Published on 10/22/2026 at 19:31 | Editorial boerse-global.de
Nokia delivered a third-quarter 2026 report that beat expectations on both lines — and then told investors the profit it books may not turn into spendable cash as quickly as previously assumed. That combination, rather than any single headline, frames the puzzle facing shareholders today.
The comparable operating profit rose 35% to EUR 605 million, according to Reuters, clearing the average estimate in an analyst poll compiled by Nokia. Revenue followed the same script: comparable net sales climbed 10% to EUR 5.154 billion, also ahead of forecasts. The beat was not confined to the bottom line.
What Nokia declined to do was raise its full-year guidance. The comparable operating profit target for 2026 stands unchanged at EUR 2.1–2.6 billion — a decision that trims the significance of a strong quarter, since management chose not to translate the surprise into a brighter annual outlook.
Two Versions of the Same Quarter
The gap between adjusted and reported figures tells its own story. While the comparable operating result advanced 35%, the reported operating profit fell 22% to EUR 196 million. Nokia also lifted its expected restructuring charges to EUR 1.1 billion, a bill that lands between operating success and the cash that eventually reaches the balance sheet.
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The company now expects to convert 35%–55% of its results into free cash flow, down from its earlier assumption. Management points to two drivers: an extra EUR 400 million of working-capital investment in 2026 and an accelerated restructuring programme. More capital tied up in day-to-day operations, in other words, plus a faster and costlier rebuild.
AI Orders Double, but the Clock Is Running
Where demand is concerned, the picture is far brighter. Net sales to AI and cloud customers more than doubled year on year, and order intake from that client group jumped 118% to EUR 1.5 billion. For the combined Optical and IP Networks businesses, Nokia expects growth of 25%–30% in 2027.
Those numbers underpin the growth case beyond the current quarter. They do not, however, erase the near-term funding need that the lower cash-conversion assumption explicitly acknowledges. Investors are left weighing two different time horizons — robust demand on one side, a weaker translation of profit into free cash on the other — with the unchanged annual guidance as the bridge between them.
A Field Trial With a Date Attached
On the technology front, Nokia and NVIDIA unveiled new capabilities for AI-driven radio networks, known as AI-RAN, saying tests and deployments with operators are edging toward commercial use. The package includes AI-based radio processing and software agents for network operations.
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A firmer marker came on Tuesday, when the two companies agreed a commercial AI-RAN field trial in Japan for 2027 with SoftBank. Nokia's anyRAN software, SoftBank's AITRAS platform and NVIDIA compute hardware will work together in the test. It is a scheduling anchor for further validation — not yet proof of widespread commercial rollout. Technical milestones and commercial results remain separate stages, and that distinction matters for how the stock is valued.
Today's share price move of -3.8% has no confirmed single trigger, and the sources of the decline cannot be pinned to any one announcement. What is clear is the test investors will apply: Nokia must convert its AI-network momentum not just into orders, but into sustainable cash generation. The SoftBank trial sharpens the technical timetable; the cut to the cash-conversion assumption exposes the financial hurdle standing in front of it.
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