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: The Phoenix who wrote (7810)	10/27/2000 6:38:24 PM
From: peggylynn	Read Replies (1) \| Respond to of 14638

The issue however is more sinister I believe... and that is Nortel other than optical and wireless targeted at carrier infrastructure is doing just OK. If the carriers slow build out or a competitor comes into either of these two gold mine markets then Nortel will be in a world of hurt. Phoenix - There isn't anything particularly sinster about what little is left of NT's legacy gear business being sluggy. Roth has bet the company's future big time on legacy gear going the way of the dinosaur and was considered a total fool for doing so when he made his first moves. As the market evolves, Roth has shown little hesitation in cutting loose the segments of NT that don't have good future growth prospects. The shedding of slower parts of the business, making acquisitions to save money and time to market for new products, and spinning out new businesses that have the ability to prosper as standalone entities will be an ongoing process at NT. There are very high switching costs in the carrier business and, so far, Nortel has a commanding lead in the optical sector. Competition is a factor in any business but reality is that capacity constraints remain more of a factor for impacting future earnings than losing contracts in head-to-head competition. So far, Roth has not demonstrated any indication of self-satisfied complacency. He very well knows that providing the best value-added propositions to customers is the key to NT's future. That in fact may be more to the point... but bottom line... as a CEO you can not provide or even imply higher guidance and not follow-through. You have to be pessimitic and always always always beat! I totally agree with your point that guidance should always be conservative and Roth should have stuck with the more ambiguous north of $10 billion for the year and he totally blew it by not preparing the analysts for the quarter. I think all the FUD being blathered about slowdowns in optics and John Roth's highly competitive nature got the better of him. However, Roth is not inclined to make the same mistake twice and I think he has more than learned his lesson. - peggylynn