Nokia raises expected restructuring and cost-saving charges to €1.1 billion
Nokia said Thursday that third-quarter sales in its network infrastructure business — the unit that houses AI and data-center networking technology — rose 17% year over year, driven by demand from AI and cloud customers in the Americas.
The Finnish company booked €1.5 billion ($1.68 billion) of orders from AI and cloud customers in the quarter and maintained its expectation that overall sales in the network infrastructure business will grow 12% to 14% this year.
Dominic Chopping reported for The Wall Street Journal that Nokia continues to see strong growth from artificial intelligence and data-center customers as the Finnish company capitalizes on its expanded product portfolio to supply key infrastructure for the AI rollout.
Sales of the company’s mobile infrastructure equipment — its traditional mobile-communication technology and services business — rose 5% year over year, with Japan, India and Europe, Middle East and Africa showing the strongest growth.
The two business lines moved at different speeds in the quarter, with network infrastructure sales up 17% year over year against a 5% increase for mobile infrastructure equipment.
Nokia shares rose 1.13%.
Nokia still expects to report a full-year group comparable operating profit of between €2.1 billion and €2.6 billion, the company said, despite expecting higher restructuring and cost-saving charges of €1.1 billion, up from a previous estimate of €800 million.
The higher expected costs come as Nokia has increased the scale of some of its restructuring programs as it accelerates efforts to simplify its operations, the company said.
About the author: Dominic Chopping is a senior reporter for The Wall Street Journal and Dow Jones Newswires in Stockholm, where he manages Nordic and Baltic real-time news covering companies, economies, forex, macroeconomics and general news in the region. He publishes news flashes and writes breaking news stories and analytical pieces.
Chopping regularly covers regional corporate heavyweights such as Ericsson, Nokia, H&M and Volvo, frequently reports on Scandinavian monetary policy and has recently expanded his coverage to green-technology start-ups. Before moving to Sweden, he worked on the U.K. corporate real-time desk in London, covering stocks from FTSE 100 majors to small AIM-listed growth businesses. He joined Dow Jones in 1999 after starting his career in the industry as a U.K. data editor at Financial Times Information.