<<Message #37630 from IQBAL LATIF at Mar 29, 2001 8:45 AM
Message 15581194
DELPHI ADCT NT and MOT all are cutting jobs as we go through a huge slow down in economy, but why should we not have it, we kept real interest rates far too high, we kept worrying about 'inflationary pressures' ignoring productivity gains, and now we brought this whole economy to a growth rate of 1.4% from some quarters of as high as 7%.
Big companies cut jobs, and people find alternate jobs, we have seen this all through the various up and down cycles, however the fact is that if your consumer confidence is up, or your new housing starts are good and your retail sellers are reporting great sales, you can make any case but not a basket case of the economy, we need to see all this what you say in numbers, last four weeks we have only seen evidence of strong economy, an unemployment rate of 5%, CPI of .3% rising prices indicative of strong demand (apparels and consumer goods) we should have seen falling prices if your deflationary secenrio that you paint is correct.
Today's jobless claim is another sign of the huge delfationary band wagon you guys are riding, take care, I want facts, raw facts, don't be emotional about job cuts, pink slips are very much a part of US economic scene. >>
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Ok ..more FACTS are in.....Maybe the readers missed this $20B warning from IQbalz beloved NT? I didn't.
Also, given the JNPR news, it all adds up to another CSCO warning too, IMO. It's a tough tech market, long hot summer ahead, tech long is wrong, SOX SUX, etc, etc.
Where does it end? An all out warning and layoff fest later this summer giving us a good low in prices this Fall?
Sounds good on paper I guess.
========June 15, 2001
Nortel Issues a Profit, Revenue Warning;
Firm Plans to Cut 10,000 Additional Jobs
A WSJ.com News Roundup
TORONTO -- Nortel Networks Corp. warned Friday of a deeper-than-expected loss and lower revenue for the second quarter, blaming reduced purchases of equipment amid a weak global telecommunications market.
Nortel also said it will cut 10,000 more jobs than the 20,000 cuts it announced in April. The latest cuts, which are expected to be completed by the end of September, will result in charges for the third quarter. Nortel's shares lost 74 cents to $9.86 in 4 p.m. trading Friday on the New York Stock Exchange.
The news came a day after another telecom-sector leader, JDS Uniphase Corp., sharply lowered its revenue outlook (see article ).
Nortel now expects to post a second-quarter loss from continuing operations of $1.5 billion, or 48 cents a share, for the second quarter and anticipates revenue from continuing operations of $4.5 billion. Analysts had expected the telecom-equipment group to lose six cents a share and had forecast revenue of $6.22 billion for the period, according to Thomson Financial/First Call.
Huge Loss on Charges
Including discontinued operations and the effect of a restructuring plan, Nortel expects to report a net loss of $19.2 billion for the quarter.
Nortel will take a restructuring charge of $830 million from the elimination of about 20,000 positions, which the company announced in April, and the closure of some facilities related to the job cuts.
In addition, Nortel will discontinue its access-solutions operations, and this move will result in a charge of $2.6 billion for the second quarter. About $750 million of this charge relates to a write-down of goodwill associated with acquisitions. The access-solutions operations, which include narrowband and broadband access, accounted for about 7.7% and 6.9% of Nortel's revenue for the 2000 full year and the first quarter of 2001, respectively.
The company also expects a second-quarter charge of $12.3 billion to reflect the write-down of intangible assets, which are primarily related to the goodwill associated with the acquisitions of Alteon WebSystems, Xros and Qtera.
Nortel also plans a charge of $950 million for increased provisions. The charge includes about $650 million in pretax manufacturing-related costs for excess and obsolete inventory and manufacturing inefficiencies. It also includes about $300 million in costs for bad debt and the write-down of certain investments.
New Financing
The company also said Friday that it received $2 billion in additional committed credit facilities through affiliates of J.P. Morgan Chase & Co. and Credit Suisse First Boston Corp., and announced that it will suspend future dividend payments to direct further investments into its business.
The restructuring moves are part of Nortel's ongoing program to reduce costs by about $3.5 billion annually. So far this year, the company has eliminated 20,000 positions and has closed its digital-subscriber-line, or DSL, division, as well as certain facilities. Nortel had 94,500 employees at the start of this year, when the company first began cutting jobs. The programs implemented so far in 2001 are expected save Nortel about $875 million a quarter, before taxes. The company said it expects to "substantially realize" that savings in the third quarter.
Nortel is scrambling to cut costs and focus on core operations, such as optical networking, as it copes with sinking demand for networking products amid its communications-carrier customers' own cost-reduction efforts.
In May, Nortel launched a search for a new chief executive following news that its current president and CEO, John Roth, would retire next April and that Chief Operating Officer Clarence Chandran is resigning for medical reasons. |
