*KEY QUESTION*: Why the divergence between NT and SDLI reports?
When Lucent announced lousy earnings, everyone passed it off as company specific, rather than industry specific.
Nortel's shortfall is much more of a shock. At first, the seasonality excuse sounds plausible. However, SDLI, Corning, and Juniper had no problems smashing estimates and all showed strong sequential growth with no seasonality slowdown.
Something is not matching. Lucent and Nortel are big customers of SDLI and GLW. How could both LU and NT have disappointing quarters, but SDLI and GLW shine?
Finally, just to clarify, is it true that Nortel had a quarterly sequential decrease in optical revenue ? If so, that is worrisome indeed. Even taking seasonality into account, F/O growth should be robust enough not to see any sequential declines. And again, it's not matching with SDLI's report, which saw 33% sequential increase in revenue from prior quarter. |
