Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (3567)	10/26/1999 4:56:00 PM
From: Foo Bar	Read Replies (1) \| Respond to of 14638

Btw, who told you the whisper, please substantiate. Thanks ====================================== Monday October 25 3:25 PM ET Optic Sales Strength Likely To Propel Nortel By Susan Taylor TORONTO (Reuters) - Growing sales of high-demand fiber-optic network gear are expected to help Nortel Networks Corp (NYSE:NT - news). better profit projections when it reports third-quarter results Tuesday. Analysts said that whisper estimates for the Canadian telecommunications equipment maker are 2-3 cents higher than consensus estimates of 26 cents per share posted by both First Call/Thomson Financial and IBES International Inc. forecast services. The market reflected that optimism Monday as Nortel stock hit C$84.90 before slipping to C$83.55 on the Toronto Stock Exchange, a gain of C$2.25. On New York, the issue gained $1-7/16 to $56-11/16. The Brampton, Ont.-based firm's strength in the red-hot optical equipment market is expected to buoy weaker sales in other divisions, analysts said. ''The optics business is extremely important to Nortel, this year and next. It has been, if you do the math, basically carrying the top line this year and the bulk of the earnings,' said Rob MacLellan, analyst at CT Securities in Toronto. Nortel stands near the top of that market, which includes such networking gear competitors as Lucent Technologies Inc (NYSE:LU - news)., Alcatel, CIENA Corp (Nasdaq:CIEN - news)., Tellabs Inc (Nasdaq:TLAB - news)., Pirelli SpA and Cisco Systems Inc (Nasdaq:CSCO - news). Customers are lapping up technology for optical networks, which transport data, video and voice traffic at high speeds. Nortel has told analysts it expects the technology to represent about C$5 billion in sales this year, a 75 percent increase over the previous year. ''Optics is the single fastest growing segment of the telecommunications equipment industry,' said Patrick Houghton, analyst at Sutro & Co. in San Francisco. ''Any upside, I think, is going to be in optical.' Analysts caution, however, that investor expectations may surpass results for the quarter, which straddles a sluggish summer sale period and is traditionally one of Nortel's weakest. ''I get the sense people are expecting them to beat the number by a considerable margin. I'm just not certain. It's not a quarter they've ever beaten by a considerable margin before,' said Paul Sagawa, analyst at Sanford Bernstein & Co. in New York. Strength in the optical division could overshadow some weaker divisions, analysts said. ''Even though that business has been growing at high double digits, maybe even hitting triple digit status percent-wise, the total revenue expectations for the company haven't gone up,' MacLellan said. ''What you've got is basically very, very strong optical sales offset by, at best, a lackluster performance from what used to be Bay.' Bay Networks, which Nortel purchased for $9.1 billion last year, develops technology that moves data traffic over wires. Supply shortfalls may also have hindered Nortel's ability to manufacture and ship optical network products. ''I continue to hear word that there were mild constraints to availability, particularly of 10 Gigabit-per-second lasers. That meant that even though they shipped a lot and billed a lot of revenue they could have billed more that they didn't,' said Sagawa. With sales growth dominated by fiber optic tools, Nortel may risk a downturn if there are any shortfalls in that division. ($1-$1.47 Canadian)