Nokia’s Restructuring Costs Mask a Solid Q2 Beat as the Stock Sheds a Quarter of Its Value
Published on 07/23/2026 at 19:02 | Redaktion boerse-global.de
Nokia’s second-quarter results, released Thursday, delivered a clear beat on the comparable operating profit line, yet the stock continues to slide — a disconnect that has wiped nearly 27% off the share price over the past month. The shares dipped as low as €8.77 during the session, a 3.44% decline, extending a sell-off that has pushed the equity roughly 41% below its 52-week high of €14.97, set on June 3.
The headline numbers tell two very different stories. On an adjusted basis, comparable operating profit jumped 18% year-on-year to €434 million, comfortably surpassing the consensus estimate of around €382 million. Revenue rose 8% to €4.82 billion, or 9% on a constant-currency basis. The adjusted gross margin improved by 70 basis points to 46.0%, while the adjusted operating margin widened by the same amount to 9.0%.
But net profit collapsed 95% to just €5 million, hammered by €390 million in restructuring charges during the quarter. Those costs — tied to the 2023-2026 cost-saving program, the integration of a China joint venture, and new adjustments in Europe — dragged the reported operating margin into negative territory at minus 1.0%. Nokia now expects total restructuring costs of €800 million for the full year 2026.
A Guidance Lift That’s More Accounting Than Operations
Nokia raised its full-year guidance for comparable operating profit to a range of €2.1 billion to €2.6 billion, up from the previous €2.0 billion to €2.5 billion. But the improvement is largely a bookkeeping exercise. The company has reclassified its fixed wireless access (FWA) customer-premises equipment business — which it has agreed to sell to Inseego — and its enterprise campus edge unit as discontinued operations. Strip those out, and the underlying operational outlook remains unchanged.
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The network infrastructure business, however, continues to hum. Revenue in that division grew 12%, powered by optical networks (up 20%) and IP networks (up 16%). Nokia confirmed its full-year growth target of 12% to 14% for the segment, with optical and IP networks expected to expand 18% to 20%.
AI and Cloud Customers Double Down
The standout performer was the AI and cloud customer segment, where revenue more than doubled — up 105% year-on-year to €446 million. In the first half of the year, Nokia booked €2.8 billion in orders from AI and cloud clients, and management expects roughly half of that to convert into revenue within the next 12 months. CEO Justin Hotard struck an upbeat tone, saying the company is entering the second half of the year with strong momentum, even as traditional telecom spending remains subdued.
For the third quarter, Nokia guided for sequential revenue growth of 3% to 7%. Operating profit, however, is expected to remain broadly flat versus Q2 due to the timing of software revenue recognition.
Analysts Remain Deeply Divided
The market’s reaction to the numbers has been muted at best. Bernstein maintained its “market-perform” rating and a price target of €5.54 — well below the current share price. Analyst Ulrich Rathe described the quarter as “not the hoped-for breakthrough,” adding that on closer inspection the results look more average than impressive.
Other houses take a starkly different view. Danske Bank and Bank of America remain bullish, with price targets ranging from €14 to above €15. The wide divergence underscores the central question hanging over Nokia: does the AI and cloud growth story justify the valuation that built up during the earlier rally, or did the stock simply run too far, too fast?
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Technicals Point to Oversold Territory
The chart paints a bruised picture. The stock now trades more than 25% below its 50-day moving average, and the 14-day relative strength index has dropped to around 34-35, edging into oversold territory. That suggests the sharp sell-off of recent weeks may be losing momentum.
Annualized volatility over the past 30 days has surged past 64%, reflecting the jitters that have gripped the stock since the June peak. Despite the correction, Nokia remains up roughly 128% over the past 12 months, a legacy of the earlier AI-driven rally. Whether the company can sustain that momentum — and restore margins once the restructuring dust settles — will likely only become clear in the quarters ahead.
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