Microsoft Posts Solid Profits
By Scott Hillis
SEATTLE (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) on Thursday posted fiscal first-quarter results that -- excluding a $1.2 billion investment charge -- beat Wall Street expectations as the software giant saw solid growth in its line-up of popular business products.
Excluding the non-cash charge, which worked out to 20 cents a share and marked the second consecutive quarter Microsoft has taken an investment hit, the company posted a profit of 43 cents a share, above most analysts' expectations.
Microsoft said net profits for its fiscal first quarter ended Sept. 30 were $1.28 billion, or 23 cents a share, compared with $2.2 billion, or 46 cents a share a year earlier, before an accounting adjustment. Including the adjustment, earnings per share were 40 cents a year earlier.
First-quarter revenues were $6.13 billion, up nearly 6 percent from the $5.8 billion a year earlier.
The maker of the Windows operating system was expected to earn between 38 cents and 42 cents a share on revenues of between $5.9 billion and $6.5 billion, according to Wall Street tracking firm Thomson Financial/First Call.
``They did pretty well all things considered. When you look at it, it looked like margin control, that is cost control leading to better margins, and a strong server business,'' said Scott McAdams, president of brokerage McAdams Wright Ragen.
CAUTIOUS NOTE FOR Q2
Investors sent Microsoft shares up as much as 75 cents to $57.50 in after-hours trading, though the stock gave up some of that to later trade around $56.94. That followed a gain of 72 cents, or 1.3 percent, in regular Nasdaq trading.
Looking ahead, Microsoft said it expected revenues to climb to between $7.1 billion and $7.3 billion in the second quarter, up at least 9 percent from $6.5 billion last year, as it rolls out its new Windows XP (news - web sites) operating system and Xbox (news - web sites) video game console.
Diluted earnings were expected to be 49 cents to 50 cents per share, right in the middle of current analyst estimates of between 43 and 57 cents a share.
Microsoft said it had not seen a huge impact from the Sept. 11 attacks on New York and the Pentagon (news - web sites), but added the economic outlook was hard to forecast.
``We don't feel we had a major impact (from Sept. 11) in that our business groups worldwide came in right where we thought they would,'' Connors told Reuters in an interview.
``The PC market was weaker than anticipated, and September was fairly weak, so that may have been a result of the attacks,'' Connors said. ``The outlook for December is that we think the PC market will be flat to down a couple of points, so it is a weaker market than we expected.''
PC shipments are important to Microsoft because virtually all computers ship with copies of the Redmond, Washington-based company's products, especially Windows.
XBOX AND XP EXPECTATIONS
Analysts said that could mean a lackluster debut for Windows XP, which the company is calling the most important update to the product in six years.
``It looks to me that Microsoft is predicting that they are not going to see much of a boost from XP this year,'' said International Data Corp. personal computer analyst Roger Kay.
Connors also said Microsoft was on track to ship between 1 million and 1.5 million of its Xbox video game machines by the end of the year. Set to launch on Nov. 15, the Xbox is Microsoft's foray into the $20 billion video game industry.
``Xbox looks pretty hot. To me its going to be a pretty hot item and I think XP's going to do pretty well. Both products will benefit from what I call 'interior entertainment' trend from the Sept. 11 fallout. People will look for ways to have fun at home instead of going out into the world which is currently looking like a risky place,'' McAdams said.
Microsoft's desktop applications segment, which includes its Office package of business productivity software, inched up 2.5 percent to $2.19 billion.
Desktop platforms, which includes Windows, grew by 7 percent to nearly $2.02 billion as corporations continued to roll out Windows 2000 (news - web sites).
But Microsoft saw strong results in its enterprise software such as the SQL database and Exchange corporate communications product. That segment grew 15 percent from a year earlier to nearly $1.2 billion.
``They just continue to take share there. In this market environment they are the most cost-effective solution,'' said John McPeake, an analyst with Prudential Securities.
HELPED BY INVESTMENT LOSSES?
Microsoft said the $1.2 billion investment charge was largely related to the same basket of cable television and telecommunications investments that led to a massive $2.6 billion write-off in its fourth quarter.
Some of the charge was offset by gains in interest and dividends, resulting in a $980 million loss for the investment line on Microsoft's income sheet.
Some 70 percent of those investments had been written down, but more losses could occur if the markets fell further, Connors told analysts on a conference call.
``The investment charge is disappointing but not that important to the Street's outlook. The Street is kind of looking at operational numbers and not that concerned with what's in their portfolio,'' McAdams said.
Microsoft also added to its legendary cash horde, managing to stuff more than $4.5 billion into coffers now bulging with nearly $36.2 billion in cash and short-term investments.
``One thing people overlook there about the write-down is that they lowered their tax burden of what they have to pay to Uncle Sam. They lowered their taxable income, and that could have increased their cash flow by $1 billion,'' McPeake said.
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Thursday October 18 8:40 PM ET
PeopleSoft Tops Wall Street Estimate
By Lisa Baertlein
PALO ALTO, Calif. (Reuters) - PeopleSoft Inc. (Nasdaq:PSFT - news) on Thursday posted a 113 percent jump in third-quarter income from recurring operations, beating Wall Street's lowered forecasts, as sales of its flagship PeopleSoft 8 software line gained momentum despite cutbacks in corporate tech spending.
The stock of PeopleSoft -- a vendor of software that automates such corporate functions as accounting, human resources and selling -- climbed to $26.05 in extended trade on Instinet, after rising $1.11 to $24.30 in the regular Nasdaq session.
PeopleSoft President and Chief Executive Craig Conway told Reuters in a conference call that the company's better-than-expected results were due to in-house cost controls and strong sales of its Internet-based PeopleSoft 8 products to new and existing customers.
Looking to the fourth quarter, the company sees per-share earnings that are in line with Wall Street's consensus estimate of 16 cents.
That target would put PeopleSoft's 2001 earnings at 56 cents a share, within the range of its original forecast for earnings of 55 cents to 60 cents.
``I continue to be very optimistic about the future ... Our visibility is improving every day,'' said Conway during the conference call.
``I'm very optimistic about 2002, although I may be the only one in the industry that is,'' Conway added in a later conversation.
Although reporting higher total revenue and software license revenue in the latest third quarter from a year ago, figures for both declined from the previous quarter.
The company said it sees slightly lower sequential growth in software license revenue -- a key measure of software sales and future performance -- in the current fourth quarter, with growth in the 10 percent range.
The company did not give 2002 guidance, but said it would provide it in January.
RECURRING INCOME JUMPS
``It was a pretty remarkable quarter ... One bright spot in a lot of darkness that I've seen in the last week or so,'' said SunTrust Robinson Humphrey analyst Bill Chappell, who noted that PeopleSoft reported a ``substantial'' pickup in profitability during the quarter.
The Pleasanton, California-based company said total revenue grew 15 percent year-over-year to $509.4 million, but declined from $533 million recorded in the second quarter.
Income from recurring operations leapt to $50 million, or 15 cents a share, from $23 million, or 8 cents, a year ago to beat Wall Street's consensus per-share earnings estimates by 3 cents.
Net income was $50.3 million, down from $68.7 million in the year-ago quarter, when PeopleSoft booked a large one-time gain from the sale of equity securities and a one-time charge to exit certain product lines.
``On almost every metric they were better than could be expected in light of Sept. 11,'' said Chappell.
To that end, Conway said last month's deadly air attacks on the Pentagon (news - web sites) and World Trade Center caused sales to the financial services arena to evaporate and contracts worth about $20 million to fall through.
SAME COMPANY, NEW STORY
Two years ago, PeopleSoft was rewriting its code to run on the Web and posting lackluster revenues as sales at rival software companies SAP AG (SAPG.DE), Oracle Corp. (Nasdaq:ORCL - news) and Siebel Systems Inc. (Nasdaq:SEBL - news) were booming on Y2K buying and the Internet frenzy.
These days, however, PeopleSoft is shining brighter than its competitors.
In the latest quarter ended Sept. 30, PeopleSoft's license revenues rose to $151.8 million from $131.5 million last year, but fell from $166 million in the second quarter.
During the same period, Siebel Systems' license revenue fell to $193.5 million from $308.8 million and SAP pulled in license revenues that were 7 percent lower at 447 million euros -- about US$404.3 million.
Database giant Oracle -- which reported results from its quarter ended Aug. 31 in the wake of last month's hijacking attacks -- posted license revenue of $731.4 million, 9 percent lower than a year ago.
``In this environment, it's tough,'' said U.S. Bancorp Piper Jaffray analyst Jon Ekoniak.
``PeopleSoft is like the Timex of the software industry -- they took a licking and they kept on ticking,'' he said, referring to old television commercials in which Timex watches kept running despite various physical abuses.
During the past year, PeopleSoft's stock price has dropped about 43 percent, less than Oracle's 61 percent drop and Siebel's 85 percent decline.
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Computer Associates Earns Top Outlook
By Ilaina Jonas
NEW YORK (Reuters) - Computer Associates International Inc. (NYSE:CA - news) on Thursday reported a fiscal second-quarter net loss of $291 million, but turned a profit under its controversial new accounting method that handily topped Wall Street's outlook.
Under generally accepted accounting principles (GAAP), Computer Associates, the world's No. 4 software maker, reported revenues fell to $734 million, compared with $1.545 billion last year.
The Islandia, New York-based company posted a net loss under GAAP of $291 million, or 50 cents a share, compared with a profit of $138 million or 23 cents a share in the year ago quarter.
But on a pro-forma basis -- translating those figures into the company's new subscription based accounting method, which spreads revenue of a deal over the lifetime of the contract -- the company earned $359 million, or 61 cents a share, compared with $229 million, or 39 cents a share, a year ago.
The results exclude one-time charges for acquisition amortization effect and one-time gains.
Analysts had generally expected earnings of 52 cents a share, with estimates ranging from 54 cents a share to 47 cents a share, according to 13 analysts polled by Thomson Financial/First Call.
The company also raised its guidance for the third quarter and said it expected to earn 61 cents a share, instead of the 50 cents a share analysts had expected, according to Thomson Financial/First Call.
In after-hours activity on Island, shares of Computer Associates on Thursday traded at $30, up from the close of $27.92. Since the beginning of the year, shares of Computer Associates are up 45.3 percent and have outperformed the S&P 500 index by 84 percent.
Computer Associates, which fought off a lengthy proxy battle this summer initiated by Texas billionaire Sam Wyly, said revenues rose to $1.442 billion from $1.397 billion a year ago. The sales and services not included in the quarter are recorded as residual revenue to be recorded as revenue at a later date.
The company -- which sells more than 1,200 software products, said it generated $466 million in residual revenue in the second quarter, bringing total residual revenue to $2.54 billion.
ACID TEST FOR NEW ACCOUNTING MODEL
The company has said the new model allows it to offer customers short-term, lower-cost deals. In the second quarter, the average price of a deal was $295,000, compared with $474,000 in the first quarter. For the company, the model also no longer allows customers to hold out signing a deal until the end of the quarter, when they believe they can squeeze out a better deal from sales people who need to make their quotas.
One of Wyly's criticisms of the company's leadership was the accounting method.
William Schaff, chief investment officer of Bay Isle Financial Corp., which manages $1 billion in investments, said he doubted the figures because only the company itself knows exactly how the figures are calculated.
``Sure they actually did get a few more deals,'' he said. ''But unfortunately, how much is real and how much is apples to apples? They've been able to do all this with almost no growth on the top line over the past few years.''
But Chief Executive Sanjay Kumar credited the company's change to a subscription-based accounting model from a one-time license fee contract model for its quarterly performance.
``I believe the key advantages that we enjoyed in the quarter from a competitive and a market prospective, the ability to leverage positive capability of the new business model and the ability to leverage the very broad product offering saw us through what has been for many a very difficult time and deliver very acceptable results,'' Kumar said.
Prudential Securities analyst John McPeake said the company's performance in a very difficult economy supported the new accounting model.
``This was good acid test for the model,'' he said. ``It's definitely working. It was a good quarter. Cash flow was strong.''
Earlier this month, Computer Associates said it would cut 900 jobs across all areas of the company and primarily in North America. The 5 percent cut will bring the company's work force down to about 17,000 employees. Chief Financial Officer Ira Zar said the layoffs will cost $20 million in the third quarter but will not be recorded as a charge. The action should save the company $15 million each quarter after that, he said.
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Thursday October 18, 8:13 pm Eastern Time
Sun Micro posts loss, sales drop 43 percent
(UPDATE: adds comment, updates stock price)
By Peter Henderson
SAN FRANCISCO, Oct 18 (Reuters) - Network computer maker Sun Microsystems Inc. (NasdaqNM:SUNW - news) on Thursday reported its second quarterly loss in a row after a string of profits since 1989, a fall from grace the company said was accelerated by effects of the Sept. 11 attacks on a slow economy.
Sun reported a net loss for its fiscal first quarter of $180 million, or 6 cents per share, compared to a profit of $456 million, or 16 cents per share, in the quarter a year ago.
Excluding one-time items, which deepened the loss, Sun lost $158 million, or 5 cents per share, in line with its warning two weeks ago. It earned $510 million, or 15 cents per diluted share, in the year-ago September-ending quarter, which had been one of the brightest ever for Sun.
Sales dropped 43 percent from a year earlier, to $2.86 billion from $5 billion, and reversed most of the whopping 60 percent rise in revenue Sun reported in October 2000.
The results matched Sun's Oct. 5 announcement that it expected to lose 5-7 cents per share and that sales would miss Wall Street estimates by up to $600 million and be $2.7 billion to $2.9 billion.
Sun stock rose in after hours trade to $8.94 from a close of $8.88 on the Nasdaq, where it had gained 8 cents before the results were announced.
Sanford Bernstein analyst Toni Sacconaghi said Sun had not added much information to its warning statement and left open the question of whether the 9 percent job cuts it plans by next June would be deep enough.
STILL COMPETITIVE
Sacconaghi said analysts expect revenue to be at least 25 percent below peak by June, possibly leaving Sun overstaffed.
``That really raises the question of 'have they right-sized the business appropriately enough going forward or are they expecting a demand rebound that I think most people are not forecasting?''' he said.
Chief Executive Scott McNealy, who on Oct. 5 had blamed the attacks on New York and the Pentagon for braking sales, said Sun was still competitive.
``The current economic environment is very difficult but the strength of Sun's vision and strategy create a competitive advantage,'' he said in a statement. Sun did not hold a conference call on Thursday.
Sun was one of the last technology companies to make major cutbacks in its work force, reflecting turmoil in an industry that expanded at lightning speed only to see dot-coms implode and the rush to networks slow.
The leader of network computers running the most popular high-end operating system, Unix, is fighting for share in a stagnant market with main rivals International Business Machines Corp.(NYSE:IBM - news) and Hewlett-Packard Co.(NYSE:HWP - news)
Shares of Sun have underperformed the Standard & Poor's 500 index by about 60 percent this year and around 80 percent since Sun hit its peak of around $64 about 13 months ago. It has also underperformed the American Stock Exchange computer hardware index by 46 percent this year.
Debra McNeill, a portfolio manager at Fremont Investment Advisors, said she had sold all her shares in Sun but gave the firm some credit for hitting the top end of its revised outlook. ``It could have been worse,'' she said.
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Thursday October 18, 8:09 pm Eastern Time
Xilinx posts second-quarter net loss
SAN JOSE, Calif., Oct 18 (Reuters) - Xilinx Inc., which designs customized chips for communications and industrial applications, on Thursday posted a second-quarter net loss on a 49 percent drop in revenues due to a slowdown in the telecommunications industry and declining sales in Europe.
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For the second fiscal quarter ended Sept. 29, Xilinx (NasdaqNM:XLNX - news) had a net loss of $176 million, or 53 cents a share, compared with a profit of $114.1 million, or 32 cents a share a year ago.
On a pro forma basis, Xilinx had a loss of $43.7 million, or 13 cents a share. These results exclude several one-time items such as the write-down of certain investments.
Wall Street analysts expected San Jose, California-based Xilinx to post a profit in the range of 1 cent to 4 cents, with a mean forecast of 3 cents a share, according to research firm Thomson Financial/First Call.
Xilinx's second-quarter operating loss was $76.8 million, compared with an operating profit of $147.1 million a year ago. Revenues fell 49 percent to $224.6 million, from $437.4 million a year ago.
``The September quarter was another difficult quarter for Xilinx and the semiconductor industry,'' said Wim Roelandts, Xilinx's president and chief executive. ``The slowdown in European sales that Xilinx experienced at the end of the June quarter continued throughout the September quarter.''
Sales to European customers fell 48 percent from the first quarter and represented 19 percent of total revenue. North America tumbled 16 percent sequentially, but ``showed signs of stabilization,'' and was 52 percent of sales.
Japan was 14 percent of sales while Asia Pacific was 15 percent of revenue.
Fully 67 percent of its revenue came from sales into the communications industry, Xilinx said, with 20 percent coming from storage and servers, while sales to other industries were 13 percent of total sales.
Shares of Xilinx, which makes programmable logic devices, or PLD chips, fell $1.04 to $26.44 on Nasdaq before results were released. The stock has fallen about 43 percent this year, compared with a 30 percent decline in the stock of its principal competitor Altera Corp.
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Thursday October 18, 7:43 pm Eastern Time
SonicWALL Q3 earnings down as expected, names new CEO
By Elinor Mills Abreu
San Francisco, Oct 18 (Reuters) - Security appliance and services company SonicWALL Inc. (NasdaqNM:SNWL - news) on Thursday reported a 14 percent drop in third-quarter operating profits and announced a new chief executive to lead a sales drive into larger companies.
The Sunnyvale, Calif.-based SonicWALL posted pro-forma net income of $5.3 million, or 8 cents per share, excluding charges. That was in line with analysts' expectations and down 14 percent from $6.1 million, or 11 cents per share a year earlier.
Cosmo Santullo, formerly president and chief executive at video and data content delivery service provider Mirror Image Internet Inc., replaced Sreekanth Ravi, who will remain as chairman, the company said.
Including acquisition and other one-time charges, the company posted a net loss of $5.2 million, or 8 cents per share, for the quarter that ended Sept. 30.
Revenue was $27.8 million, a 51 percent increase from the $18.4 million in revenues posted a year ago, according to the company, which sells appliances used to protect corporate networks from intruders and viruses.
Analysts polled by Thomson Financial/First Call predicted SonicWALL would report earnings per share of 8 cents, from a range of 7 cents to 9 cents.
GOOD NEWS, BAD NEWS
SonicWALL offered guidance for the current quarter that was below analysts' forecasts but said that next year would be stronger than Wall Street had expected.
SonicWALL forecast that 2002 sales would grow 40 percent over the previous year, with earnings per share of 40 cents.
For the fourth quarter, the company forecast earnings per share of 8 cents to 9 cents and revenue of between $31 million and $32 million.
Analysts had put fourth-quarter estimates at 11 cents per share and revenues at $32.72 million and 2002 estimates at 35 cents per share and revenues at $112.47 million.
The company holds the leadership position, at 62 percent, in the small and medium-size corporate market for so-called ``firewall'' appliances, but is looking to increase its sales to large corporations, an area where the new CEO has experience, said Ravi, who co-founded the company in January 1991.
Prior to joining Mirror Image, Santullo was senior vice president of global marketing at storage company EMC Corp. (NYSE:EMC - news) and a manager at International Business Machines Corp. (NYSE:IBM - news) for more than 20 years.
Shares in SonicWALL closed at $16, up $2.24, on the day, and were trading at $17.26 in after hours trade, following the announcements.
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KLA-Tencor 1st quarter profit, sales rise
By Daniel Sorid
NEW YORK., Oct 18 (Reuters) - Semiconductor equipment maker KLA-Tencor Corp. (NasdaqNM:KLAC - news) on Thursday said profits and revenues rose in its fiscal first quarter, citing strong orders from the United States and Taiwan.
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But the San Jose, Calif.-based company, whose systems help chip makers improve the quality and speed of their production, said a weaker economy would push second-quarter earnings below Wall Street consensus expectations.
Chip equipment companies have been hit particularly hard by a drop in demand for computers and other electronics, as chip makers defer or cancel orders on new equipment. KLA-Tencor, however, has been helped by a industry-wide push toward more complicated chip-making processes.
``They are just riding this downturn out better than anybody else,'' said Steven Pelayo, an analyst with Morgan Stanley Dean Witter.
Pelayo said the company has been able to hold orders relatively stable, as companies such as top chip maker Intel Corp. (NasdaqNM:INTC - news) have continued to upgrade to equipment that, for instance, allow more intricate features to be printed onto chips.
For the first quarter ended Sept. 30, KLA-Tencor said its income after tax was $86 million, or 44 cents a share, on sales of $503 million. That compared with income after tax and before accounting changes of $29 million, or 15 cents a share, a year earlier, on sales of $383 million.
The company had been expected to report a per-share profit of 43 cents a share, within a range of 37 cents to 46 cents, according to 23 analysts surveyed by research firm Thomson Financial/First Call.
Orders, which were down 5 percent in the quarter, had been on track to be flat or even higher until the Sept. 11 attacks, but some customers deferred parts of their orders to future quarters, the company said.
``There certainly was more skittishness than we thought before September 11,'' said Chief Financial Officer John Kispert. ``Going forward, that certainly gives us more apprehension, but so far so good, we haven't seen anything dramatic.''
For the second quarter, KLA-Tencor said order level should be similar to first-quarter orders. Also, the company expects profit of between 23 cents and 25 cents a share on revenues of between $360 million and $390 million. Analysts, on average, had expected a profit of 29 cents a share, in a range of 21 cents and 44 cents a share, according to First Call.
Shares of KLA-Tencor fell 33 cents, or about 1 percent, to $34.88 at the close of regular trade on Nasdaq, but the stock has outperformed the Philadelphia Stock Exchange semiconductor index (^SOXX - news) by more than 40 percent since January
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Nortel Posts Big Losses, Can't Predict Future
By Ian Karleff
TORONTO (Reuters) - Nortel Networks Corp. (NYSE:NT - news) (NT.TO), reporting shrinking sales and a $3.5 billion loss in the third quarter, said on Thursday that demand for its telecommunications equipment was still hard to predict, although it was showing signs of hitting sustainable levels.
Nortel, which has seen its business erode on sagging demand from network carriers, said losses, including all charges, in the third quarter ended Sept. 30 were $3.47 billion, or $1.08 a share. This is far bigger than a loss of $586 million, or 17 cents a share, in the year-ago period.
``While we believe we are beginning to see early indications that capital spending by service providers is approaching sustainable levels, it still remains difficult to predict,'' Nortel's chief financial officer and soon-to-be chief executive Frank Dunn said in a statement. ``I don't think anybody should assume that there will be an uptick in the fourth quarter.''
Nortel said it would not provide financial guidance for the fourth quarter of 2001 or for next year, as the effects of the Sept. 11 attacks on the United States are still unknown, and the U.S. economy remains very sluggish.
Sales of optical long-haul equipment were the hardest hit, with the company writing down $750 million of obsolete inventory, while revenues for wireless network gear rose 15 percent on a year-over-year basis.
Restructuring efforts that will see the company's workforce shrink to 45,000 employees, or less than half 2000 levels, will be completed by the end of October, and should result in $4 billion in annual savings starting at the beginning of fiscal 2002, said Nortel.
``There is a feeling that management is now able to at least get a feel for what earnings are going to be like and manage to that business level. It generally means that the downturn in the business is nearing its end. That doesn't mean you see an uptick yet,'' said Tim Ghriskey, a senior partner in investment management firm Ghriskey Capital Partners.
Ghriskey said Nortel's business continues to suffer from excess inventory, which is exacerbated by heavy discounting of prices by competitor Lucent Technologies (NYSE:LU - news). Also, incumbent phone firms are no longer under pressure to quickly build out their networks as smaller rivals fall into bankruptcy.
Nortel's losses from continuing operations, before charges, were $854 million, or 27 cents a share. The pro-forma net loss from continuing operations, including all incremental provisions and charges, was $2.18 billion or 68 cents a share.
Analysts polled by Thomson Financial/First Call were expecting, on average, operating losses excluding charges of 28 cents a share and revenues of $3.5 billion.
Nortel warned in October that third-quarter sales would come in at $3.5 billion, with a loss, excluding charges, of about $910 million, or 28 cents a share. Including charges, it said losses would be $3.6 billion, or $1.13 a share.
Revenues in the quarter sagged to $3.7 billion, from $6.7 billion. That is a level that Nortel has said can produce profits once all restructuring is finished, and is higher than earlier guidance.
``Despite the fact that the U.S. economy is really really sluggish, revenue levels are holding up reasonably well, and the aftermath of Sept. 11 is putting more traffic on the networks than ever before,'' said Nortel's outgoing chief executive John Roth in a conference call with investors.
Shares of Nortel closed up 8 Canadian cents at C$9.33 on the Toronto Stock Exchange on Thursday. The stock is now down 93 percent since the beginning of the year as investors remain pessimistic about its prospects.
Nortel said that, despite the current industry correction, its balance sheet is well positioned with $3.35 billion in cash and cash equivalents, up considerably from $1.9 billion at the end of the June quarter.
Debt levels, on the other hand, ticked up 16 percent to $5 billion, in line with analyst expectations, while the company said it paid off over $1 billion in short-term debt.
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