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

To: t2 who wrote (4408)	1/26/2000 9:10:00 AM
From: Scripts	Respond to of 14638

Soaring earnings cap sparkling Nortel year: Operating profit up 62% 1999 was a pivotal year as firm focused on fibre optics By MICHAEL LEWIS The Financial Post Nortel Networks Corp. yesterday posted a 62% year-over-year jump in operating profit and said the good times will continue in 2000 as it exploits global demand for optical transmission equipment and for gear that speeds access to the Internet. Both fourth-quarter and 1999 results outpaced market expectations -- and underpinned the 245% rise in the value of Nortel shares over the past 12 months. That increase prompted the company's announcement after markets closed yesterday -- along with year-end and fourth-quarter results -- that it has approved a two-for-one stock split. It will be the third time in less than two years that Nortel has subdivided its shares to make them more affordable to retail investors. With the exception of its enterprise division, which saw a fourth-quarter decline in sales as customers diverted budgets to Y2K repairs, chief executive John Roth said Nortel is "firing on all cylinders." He said the company is sticking by its previous forecast of 21% sales growth in 2000. "1999 really was a pivotal year," Mr. Roth said, adding that much of Nortel's growth came from the United States. Canada's largest company by stock market value and North America's second-biggest tele-communications equipment maker, Brampton, Ont.-based Nortel earns less than 6% of its global revenues in Canada, down from about 10% two years ago. Along with geographic changes in its business, a series of acquisition over the past two years -- with a total price tag of about $12-billion (all figures in U.S. dollars) -- has fuelled a major shift in Nortel's product offerings. Revenue from sales of fibre-optic network equipment used to stream data, voice and video traffic along telephone wires, for example, nearly doubled, while Internet access equipment sales rose sharply and revenue from wireless products grew by more than 30%. Mr. Roth said selling optical gear is quickly becoming Nortel's main business, adding that a previously announced increase in manufacturing capacity may be expanded. In the meantime, he said, "we are doing a good job of making our customers stay with us." Nortel's 1999 revenues rose 26% to $22.22-billion, while operating profit jumped to $1.73-billion from $1.07-billion the year before. Including one-time charges largely related to acquisitions, Nortel recorded a net loss of $197-million, (15c) a share, for 1999 versus the previous year's loss of $569-million, (50c) a share, also due to acquistions. Including costs and one-time gains and charges in the quarter ended Dec. 31, Nortel reported net earnings of $417-million (30c) a share. That is up from a loss of $341-million, (26c) a share, in the year-earlier period, when there were large charges related to acquisitions. Better-than-expected growth in several divisions helped fuel sales for the quarter of $6.99-billion, up 21% from $5.77-billion the year earlier. "The strategy that we've had to shift our portfolio to being at the heart of the Internet is starting to show up in Nortel's revenue numbers and certainly in our order bookings," which Mr. Roth said ratcheted up in the fourth quarter.