Nokia said it continues to capitalize on surging demand from artificial intelligence and data-center customers, as supply constraints are pushing some clients to place longer-term orders.
The Finnish company has expanded its portfolio to supply key data-center infrastructure for the AI rollout, while continuing to serve its traditional telecom equipment market.
The company said Thursday that second-quarter sales in its network infrastructure business--the unit that houses AI and data-center networking technology--rose 12% on year, driven by demand from AI and cloud customers in the Americas.
It booked 2.8 billion euros ($3.2 billion) of orders from AI and cloud customers in the quarter and still sees overall sales in the network infrastructure business growing 12%-14% this year.
Sales of the company's mobile infrastructure equipment--its traditional mobile-communication technology and services--rose 6% on year, with Asia Pacific and Europe, Middle East and Africa showing the strongest growth.
For the year ahead, the company is still tracking somewhat above the midpoint of its full-year group comparable operating profit guidance, which now stands at between 2.1 billion and 2.6 billion euros from 2 billion and 2.5 billion euros previously. The increase is due to a change in the presentation of two businesses, so operationally, the outlook is unchanged, it said.
However, the AI boom is creating shortages of key components such as semiconductors and increasing costs, with Nokia Chief Executive Justin Hotard previously noting lengthening lead times as the company looks at ways to secure supply and limit costs.
"Supply continues to be the main industry constraint, prompting our customers to place longer-term orders," he said Thursday.
As the company works to pivot more toward high-growth opportunities, it said it has launched additional restructuring actions that mainly impact Europe. The programs are a further step in simplifying the operating model and reallocating resources and are expected to lead to restructuring charges of 200 million euros this year.
These costs come on top of an existing 250 million euros of charges from a previous cost-saving plan that will complete this year and yield savings at the high end of an 800 million to 1.2 billion euro range, while integration of a Chinese joint venture will see around 350 million euros of costs in 2026.
In total, restructuring charges are expected at 800 million euros this year, up from a previously guided 250 million euros.
Nokia posted an 18% rise in second-quarter group comparable operating profit to 434 million euros, beating the 384 million euros expected in a FactSet poll.
Sales rose to 4.82 billion euros against the 4.84 billion-euro FactSet estimate.
The company said it assumes third-quarter sales will increase between 3% and 7% on the quarter with largely flat comparable operating profit due to the timing of some software revenue recognition before a "meaningful" increase in the fourth quarter.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 23, 2026 02:31 ET (06:31 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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