Nortel CC, October 24, 2000, Part I
Review of numbers. . . [see press release]
Optical: 150% growth y/y, 27% seq. After 6 mos = full 99. . . .
US 58% Q, 56% 6 mos; carrier in excess of 75% both seq and Q.
Outside US and Canada. 43% growth. Europe strong 6most, 50%; 60% growth in carrier growth in Europe. Asia down slightly, single digits for 6mos.
42.7% gross margins; up from 41.2%.
Carrier margins up for quarter, flat for 6mos. Flat in Enterprise.
SGA 1.48B, 18.9% sales, vs. 19.1% in 2Q 99. RD 29% sales, vs. 18.8% in 99.
Business model, NT’s return of sales improved 1% in Q. to 6.4%. Imp. In Opmargins.
1 – 59M “other” --- no negative Brazilian exchange and customer financing interest income was up. Cash up from customers!
DSOs, 78 in Q2; improved seq 22%, and 26% y/y, excluding customer-financed. Will improve in quarter.
Customer financing, very active and successful for 6mos. Balance sheet flat for 6mos. Layout 2billion; firm commitments are flat for year. More cash transactions than at this time last year. Inventor was in mid 60s. 3.6B in inventory, down y/y. 3.3B in cash, up from first of year.
Rev. in 2001 will meet 40% range. High 30s from operations. Will grow faster than market. Revs and earnings will be 30 to 35% range.
John Roth:
Pleased with strong financial growth. Btob 1.35 on 85% order increase in quarter. Can raise expectations to 40% plus. Driven by optical business. 150% rev. growth in quarter. We wanted to break 10B in year. We’ll exceed that number. North of 10B shipments for year. Operations managing supply chain in constrained market. This is a production limited environment. We are sold out. This requires excellent execution and are ahead of plan. WE are ramping production capacity. It is not enough. Continued demand shows we have more to do. 1.9billion added. 2.5 increase on earlier expansion announcement. UK and later in US in NW. Location not pinpointed yet. 1.2B in expanding optical components we make. Will ramp 3.5 in components. Tightening in supply and we are concerned that we have a good choice of supply in industry. 2.5 billion in components business. We can triple that kind of capacity.
[wireless. . .]
What’s behind our successes, “wings of light” strategy. Backbone structure, optics behind us, confidence in IP, fast throughput to customers. Trials with Telstra, confirmed data rates (gives speeds, which I didn’t catch).
Local Internet revs grew 80% and we’re growing share in all fronts. Wireline business doing well. CBX ports more than all of last year.
Core switching grew over 30%. Blend of TDM and ATM technologies. Smooth transition.
Enterprise wasn’t as strong as we’d like. Double digit input growth. Should see improvements in second half. Strong improvement in managing assets.
Outlook for year: Strong momentum in optical, wireless and access. Strong growth in ATM-IP switching. Gives us confidence in 40% growth in 2001. Will outpace market by at least 10%. |
