Nortel Profit Surges Above Second Quarter
Estimates
BRAMPTON, Ont. (Reuters) - Nortel Networks Corp. (Toronto:NT.TO -
news)(NYSE:NT - news), the world's No. 2 network equipment supplier,
said on Tuesday that surging demand for its fiber-optic, Internet and wireless
equipment drove second-quarter earnings 28.5 percent above market
expectations.
Nortel said its profit from operations, excluding one-time charges, rose to
$561 million, or 18 cents a share, from $320 million, or 11 cents a share, in
the year earlier quarter.
The average estimate of 29 brokers polled by First Call/Thomson Financial
was a profit of 14 cents a share. The consensus of 30 brokers surveyed by
IBES forecasting service was for 14 cents.
Including acquisition costs, Nortel reported a net loss of $745 million, or 26
cents a share, compared with a net loss of $258 million, or 10 cents a share,
last year. Second-quarter revenues grew 48 percent to $7.8 billion from $5.3 billion last year.
Nortel also said it expects sales in 2000 to grow in the low 40 percent range, up from a previous estimate of
30-35 percent, and that growth in earnings per share from operations will be in the high 30 percent range. Chief
financial officer Frank Dunn said Nortel will outpace market growth rate of 20-21 percent in 2001, with
revenues and earnings per share from operations increasing in the 30-35 percent range.
Nortel, which said on Monday it will spend $1.9 billion to more than double fiber-optic manufacturing capacity,
is in talks to sell its fiber-optic parts business to Corning Inc. (NYSE:GLW - news), a source close to the deal
told Reuters. Reports suggest that a stock swap worth more than $100 billion would result in Nortel owning
more than 50 percent of Corning, while Corning would own the optical parts unit and maintain its
independence. |
