DJ Nortel Sees 25% Rev Growth From Fiber-Optics Opers In 4Q
NEW YORK (Dow Jones)--Nortel Networks Corp. (NT) expects revenue in its fiber-optics
business in the fourth quarter to rise 25% from the third quarter, signaling that this part of its business
remains a big driver behind the networking company's recent success.
In the third quarter, Nortel reported better-than-expected earnings largely because of growing
demand for its optical gear. Frank Dunn, Nortel's chief financial officer, made the latest forecast at
Nortel's annual conference for financial analysts in New York.
The smooth running of the conference, which is ongoing, stands in sharp contrast with the event last
year. At last year's meeting, Nortel stock fell sharply after the former chief financial officer, Wes
Scott, spooked audience members with unclear financial projections.
In Wednesday's meeting, Dunn took pains to be clear with the financial guidance he provided
analysts. Dunn also said he sees revenue from Nortel's wireless business "accelerating" in the fourth
quarter on signs that its wireless equipment sales in Latin America are picking up after languishing
earlier this year.
Dunn reitereated that the company is still on track to achieve $250 million to $350 million of annual
savings by the end of 2000 from outsourcing some of its manufacturing operations. In addition,
Nortel is looking to achieve other cost savings by outsourcing some administrative functions.
Announcements in this area will be made over the next while.
Dunn also reiterated the company financial guidance of revenue growth of about 20% in 2000 and
growth in share earnings at a faster pace.
-Ben Dummett, Dow Jones Newswires; 416-306-2024
Bill Conner, president of Nortel Networks Corp.'s (NT) enterprise operations, told analysts that the
company expects revenue from equipment sales to corporate customers in 2000 to achieve a growth
rate "in the low teens," up from single-digit growth in the third quarter of 1999.
However, Conner wouldn't predict when next year Nortel is expected to start achieving the
projected low-teen growth rate. He said the timing will depend on how quickly corporate customers
resume buying after dealing with post-Year 2000 issues.
He also declined to say when profit margins in Nortel's enterprise business would rebound.
-Ben Dummett, Dow Jones Newswires; 416-306-2024 |
