Nortel's Losing Streak Continues
This story caught my eye because VoIP heavyweight Nortel has really suffered a lot the past couple of years.
Nortel Sees Wider Loss in First Quarter May 16, 2006 TORONTO (Reuters)—Nortel Networks Corp., one of the world's largest telecommunications equipment suppliers, said Tuesday it expects a deeper first-quarter loss, though it expects high single-digit revenue growth in 2006.
The Canadian firm expects a gross margin of around 40 percent of revenue for the year, while operating expenses will be flat or slightly higher.
For the first quarter of 2006, the company expects revenue to be flat to slightly lower, with a slightly higher loss compared with the first quarter of the previous year.
The Reuters story piqued my curiousity about goings on at Nortel, so I went and grabbed these two releases from their corporate news site.
TORONTO - Nortel Networks* Corporation [NYSE/TSX:NT] and its principal operating subsidiary, Nortel Networks Limited ("NNL"), provided a status update pursuant to the alternate information guidelines of the Ontario Securities Commission ("OSC"). These guidelines contemplate that the Company and NNL will normally provide bi-weekly updates on their affairs until such time as they are current with their filing obligations under Canadian securities laws.
Outlook (a)
Commenting on the Company's financial expectations, Peter Currie, executive vice president and chief financial officer, Nortel, said, "We expect strong revenue momentum for the rest of 2006, resulting in high single digit growth for the full year 2006 compared to 2005. For the full year, we expect gross margin to be around 40% as a percentage of revenue and operating expenses to be flat to up slightly from 2005, with foreign exchange and growth related expenses off-setting productivity and efficiencies. For the first quarter of 2006, we expect revenues to be flat to down slightly and a slightly higher loss compared to the first quarter of 2005."
Mixed among the financials, I found this.
MAY 16, 2006
TORONTO - Nortel* [NYSE/TSX: NT] President and CEO Mike Zafirovski announced a new business focus on driving market share in super-fast Ethernet networks essential to handling the coming growth of bandwidth-hungry video applications.
Nortel's strategic initiative - Metro Ethernet Networks - will be led by Philippe Morin as president. This initiative will offer innovative Ethernet portfolios designed to deliver high quality, reliability and security.
"Nortel's future depends on our continued leadership in innovation and with our new Metro Ethernet Networks we're bringing our best technologies together, backed by an initial incremental investment in R&D," said Zafirovski. "In his previous position as general manager, Optical, Philippe grew the business approximately 24 percent last year to US $1.2 billion. I have every confidence he will build on that leadership and momentum through Metro Ethernet Networks."
"With IPTV, IMS and other applications evolving quickly, service providers will face huge bandwidth challenges across all networks - wireless, wireline and cable. Metro Ethernet Networks is the first step in getting Nortel in front of that curve to win in this critical new space in the market," said Zafirovski.
While the financial suffering continues, Nortel is continuing to look to the future, embracing IPTV and IMS solutions are part of their broader Metro Ethernet strategy. They also mention a focus on wireless are part of that strategy.
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