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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: oldirtybastard who wrote (6563)	10/24/2000 6:48:35 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 19428

Nortel.... no good, LU mentioned. Could bounce,...but before it gets really ugly. -------------------------------------------------------------------------------- Tuesday October 24, 6:34 pm Eastern Time Nortel stock pounded as optical sales slow (UPDATE: Updates with detail from conference call, adds byline. In U.S. dollars unless noted.) By Susan Taylor OTTAWA, Oct 24 (Reuters) - Nortel Networks Corp. (NYSE:NT - news) stock was hammered in after-hours trade on Tuesday as optical network system sales slowed from previous rates as customers worked through inventory stockpiles. Shares in the world's No. 2 telecommunications equipment maker slumped 20 percent in after-hours trade to $50 on Instinet from a close of $63-5/16. Jittery investors found little comfort in third-quarter earnings per share figures that beat analysts' estimates by one cent or an increase in growth forecasts. Nortel said earnings per share in 2000 should grow in the low 40-percent range, up from the high 30 percent range. ``What we have here is a classic correction and field inventory is resulting in a slowdown in unit sales by Nortel, clipping the rate of growth artificially,'' said Alex Henderson, analyst at Salomon, Smith Barney. Nortel's optical network system sales grew 90 percent in the quarter, versus several analysts' expectations of about 120-125 percent. The company said a tight supply of optical systems led several customers to amass inventory, which Henderson calculates was worth $300 million to $350 million. Nortel also said it needs to boost the number of staff it has to install systems. ``The good news is that there's plenty of equipment now for our people to work on now so they're not being held up,'' said chief executive John Roth in a conference call. ``Now we're at the point where the shortages are being removed.'' Nortel said customers have worked through their excess supply and it expects sales to rebound in the fourth quarter, when it is close to being sold out. Nortel also said on Tuesday it expects annual optical equipment sales will surpass $10 billion in the year, a shift from previous projections of up to $12 billion in sales. The company posted net earnings of $574 million, or 18 cents an adjusted share, on revenues of $7.31 billion in the quarter versus the year-earlier net earnings of $314 million, 11 cents a share, on revenues of $5.15 billion. Earnings just beat the average estimate of 17 cents a share from 33 analysts polled by First Call/Thomson Financial, based on forecasts ranging from 15 cents to 19 cents per share. A group of five analysts had forecast revenues $7.6 billion, with forecasts ranging from $7.3 billion to $7.94 billion. ``For the last two quarters in a row, Nortel has had upside in revenues of approximately $1 billion,'' said Michael Neiberg, analyst at Chase Hambrecht & Quist. ``This quarter it looks like the revenue number is at the low end of the range, so I think that is a breaking of a trend.'' After it factored in acquisition-related costs, Brampton, Ontario-based Nortel recorded a net loss of $586 million, or 20 cents per share. Analysts had warned that if Nortel failed to post strong results or scaled back its growth forecasts like Lucent Technologies Inc. (NYSE:LU - news), its stock would be battered. There were worries that a traditionally weak sales period in Europe and an equipment spending slowdown from phone companies would affect Nortel's results. Arch-rival Lucent on Monday ousted its chief executive and posted a 22-percent decline in fourth quarter profits due largely to late development of new products. Lucent, the No. 1 telecoms equipment maker, also lowered first-quarter forecasts, saying it did not expect to post a profit. ``We're doing a little better than we expected on our earnings so we're increasing the outlook,'' Roth told Reuters. ``We think the market's continuing to gain steam -- we've gone through a very, very active summer.'' Nortel said it expects to grow faster than its peers in 2001, with growth in revenues and earnings per share from operations growing in the 30 to 35 percent range. On average, a group of 30 analysts expected fourth-quarter earnings of 26 cents per share, said First Call/Thomson Financial. Forecasts range from 22 cents to 28 cents. Wireless equipment sales also expanded in the quarter, gaining 56 percent over last year. In the third quarter, Nortel has signed contracts worth $1.2 billion. ($1 equals $1.51 Canadian) Email this story - View most popular stories emailed -------------------------------------------------------------------------------- More Quotes and News: Lucent Technologies Inc (NYSE:LU - news) Nortel Networks Corp (NYSE:NT - news) Related News Categories: US Market News -------------------------------------------------------------------------------- Help -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Copyright © 2000 Yahoo! Inc. All rights reserved.Privacy Policy - Terms of Service Questions or Comments?