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

To: CIMA who wrote (7835)	10/28/2000 1:06:25 PM
From: Dale Stempson	Respond to of 14638

RBC Dominion Securities Report Here's another report taken from the Yahoo! NT thread. Once again, I cannot confirm its accuracy or authenticity. Link: messages.yahoo.com NT Backbone by: dudevest, 10/28/00 12:00 pm, Msg: 65727 of 65740 The following was sent to me by head of RBC DS on Oct 25: ======================================= Nortel Networks (NT) fell ahead of the release of the Company's third-quarter results. The stock fell US$3.63 to $63.31. Nortel reported actual results after the close and EPS came in two cents ahead of expectations at $0.18. However, the market will likely focus on the revenue number, which was slightly lower than expectations. Revenues were $7.31 billion, versus RBC Dominion Securities' forecast of $7.4 billion. The "other income" and a lower tax rate. Annual growth in Nortel's optical business, a source of intense focus for the street, came in lower than expected at 90% (vs. expectations of 150%) feeding current fears of a slowing in carrier capital spending. The analyst at RBC Dominion Securities does not believe that Nortel's September quarter results in optical are in any way indicative of a trend going forward, and in fact expects optical revenues and growth rates for Nortel to rebound sharply in the December quarter. Q4/00 and 2001 optical revenue estimates have been left unchanged, however, 2000 estimates have been lowered slightly. On the positive side, lower optical revenues were offset by higher than expected wireless and switching revenues, which should continue to offer upside to estimates going forward. Specifically on the optical side, according to the company, factors that affected optical revenue growth included: customer inventory buildup in optical products; an installation and commissioning bottleneck which limited NT's ability to ship more optical equipment to customers; seasonal effects as vacations in July and August had slowed spending. While all of these issues contributed to a disappointment, RBC Dominion Securities believes it will only impact Q3. First, Nortel believes customer inventories were fully depleted in the third quarter. With respect to installation, the analyst believes the Company is on-track to expand installation resources to meet 20%+ sequential growth in Q4. In summary, RBC Dominion Securities believes that this third-quarter blip does not materially change our forecast for the business through 2001. The outstanding growth prospects in optical and the much improved outlook in wireless switching have led the analyst to raise his 2001 revenue and EPS estimates. The US$100 target remains intact. ======================================= Regards - Dale