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Technology Stocks : Nortel Networks (NT)

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To: larry pollock who wrote (10415)	3/27/2001 5:03:49 PM
From: larry pollock	Read Replies (1) of 14638

Nortel Warns Yet Again By Scott Moritz Senior Writer 3/27/01 4:58 PM ET Nortel (NT:NYSE - news) Tuesday warned of an earnings shortfall for the third time this quarter and set plans to slash an added 5,000 jobs as the economy continues to slow. The Toronto-based maker of telecom gear now expects a first-quarter operating loss of 10 to 12 cents a share, wider than the 4-cent loss it forecast Feb. 15. Revenue for the quarter will amount to $6.1 billion to $6.2 billion, down from February's $6.3 billion forecast. The company also slashed earnings guidance when it reported fourth-quarter numbers in January. The company said last month it would cut 10,000 jobs to cope with the ongoing economic slowdown; Tuesday, Nortel said worsening conditions would necessitate additional layoffs. Many Nortel watchers have predicted an earnings shortfall. Nortel earned the distrust of the Street last fall by talking up its business and then missing its numbers. The disappointment was the first of many shortfalls among the gear makers. Evidence of Nortel's ongoing deterioration has been mounting recently. The company lost out to rivals for part of a $900 million contract with British Telecom (BT:NYSE ADR - news) and another deal with 360Networks (TSIX:Nasdaq - news) in the past two weeks, as a pricing war intensifies across the sector. Adding to that pressure, big customers such as Qwest (Q:NYSE - news) have made it clear that they are finding premium used gear for cheap. Nortel has forecast 14% sales growth this year, but several analysts feel that doesn't reflect the poor health of the market. Earlier this month, UBS PaineWebber analyst Nikos Theodosopoulos cut his revenue-growth estimate to 4%.

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