News!!!
NEW YORK -(Dow Jones)- Becoming the latest
telecommunications-equipment maker to do so, Canadian company Northern
Telecom Ltd. Tuesday warned its revenue this year will fall short of
expectations.
But NorTel backed earnings projections for 1998 and earnings and
revenue views for 1999, clearing some confusion among befuddled
investors who earlier thought the company issued warnings for both
years.
Around midafternoon, the New York Stock Exchange halted trading in
NorTel's (NT) shares after they dropped $5.25, or 13%, to $35.50 on
volume of 3.9 million. NorTel is listed both in New York and on the
Toronto Stock Exchange.
NorTel said that while revenue for the second half of this year will
be shy of estimates, it expects to meet earnings targets for the year.
Specific estimates from the company weren't available, but the mean
estimate of analysts surveyed by First Call was for a profit of $1.83 a
share for 1998, and $2.30 a share for 1999. Both figures are in U.S.
dollars.
Other telecom-equipment companies have issued warnings in recent
weeks. But market leader Lucent Technologies Inc. has said it sees no
signs of weakening demand and that it remains confident it will meet
forecasts for revenue and earnings.
French telecom-equipment and electronics concern Alcatel SA stunned
investors earlier this month by warning that earnings this year will
come in far below analysts' expectations. Motorola Inc. (MOT) has been
in the throes of a protracted slump, and smaller rivals Ciena Corp.
(CIEN) and Tellabs Inc. (TLAB) also have issued warnings.
Lucent, spun off from AT&T Corp. in 1996, said it currently has $18
billion in orders and is winning business away from competitors across
the board. Other rivals include Finland's Nokia Oy (NOKA) and Swedish
company Telefon AB L.M. Ericsson (ERICY).
And Cisco Systems Inc., the biggest maker of computer-networking
gear, has become a competitor as the voice and data-networking
industries rapidly converge. Lucent, Cisco (CSCO) and the other
companies are racing to develop gear that can handle voice, video and
data simultaneously. Lucent and NorTel are broadening their lines of
data-networking products in order to help telephone companies manage the
exploding streams of traffic.
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