BRAMPTON, ONT., Jan 18, 2001 (BUSINESS WIRE) -- Nortel Networks (NYSE:NT)(TSE:NT.)
-- Revenues up 42% for 2000; 34% in the quarter
-- EPS from Operations up 42% for 2000; 24% in the quarter
-- Optical Internet Revenues top US$10 billion for 2000
-- Confirms Guidance for Q1 and 2001 within Previous Ranges
Nortel Networks Corporation(a) (NYSE:NT)(TSE:NT.) today reported results for the fourth quarter and the year 2000 prepared in accordance with U.S. generally accepted accounting principles.
Fourth Quarter 2000 Results
Revenues increased 34 percent to US$8.82 billion for the fourth quarter of 2000 from US$6.57 billion for the same period in 1999. Net earnings from operations applicable to common shares(b) for the quarter were US$825 million, or US$0.26 per share on a diluted basis, compared to US$607 million, or US$0.21 per share on a diluted basis, for the same period in 1999, an increase in earnings per share from operations of 24 percent. Including Acquisition Related Costs(b), stock option compensation from acquisitions and divestitures, and one-time charges, Nortel Networks recorded a net loss applicable to common shares in the fourth quarter of 2000 of US$1.41 billion or US$0.46 per share.
Year 2000 Results
For 2000, revenues increased 42 percent to US$30.28 billion from US$21.29 billion for 1999. Net earnings from operations applicable to common shares(b) for 2000 were US$2.31 billion, or US$0.74 per share on a diluted basis, compared to US$1.43 billion, or US$0.52 per share on a diluted basis, for 1999, an increase in earnings per share from operations of 42 percent. Including Acquisition Related Costs(b), stock option compensation from acquisitions and divestitures, and one-time gains and charges, Nortel Networks recorded a net loss applicable to common shares of US$3.47 billion, or US$1.17 per share, for 2000.
"We are extremely pleased with our fourth quarter results, especially the strong growth in Optical Internet, Wireless Internet, and Core IP Networking. Overall, the fourth quarter capped a year of exceptional growth, which was in line with our expectations. We saw our High Performance Internet solutions portfolio, one of the strongest and broadest in the industry, drive the many achievements and gains made across all geographic areas," said John Roth, president and chief executive officer, Nortel Networks.
"Looking back over 2000, our highlights and achievements included:
-- Overall, revenues for our Optical Internet solutions topped
US$10 billion for the year, more than doubling 1999 revenues.
-- We extended our No. 1 global market share position in long
haul optical networking, according to leading industry
analysts. We continued to lead the drive toward the all
photonic network and the industry's first 10 Gigabit Ethernet
interfaces for long haul dense wavelength division
multiplexing (DWDM).
-- We surpassed the competition to move into the No. 1 global and
North American market share position for DWDM metropolitan
optical networking. We announced a number of customer wins
based on our market leading Optera 5200 Multiservice Platform.
-- We established ourselves as a global leader in the Wireless
Internet market, ranking No. 2 in third generation wireless
contract awards over the last 18 months according to Merrill
Lynch. Key announcements were BT Cellnet in the United
Kingdom, AirTel and Xfera in Spain, and T. Mobile in Germany.
Our intelligent third generation core IP infrastructure --
that supports the delivery of sophisticated, high margin
services for the Wireless Internet -- continued to distance us
from the competition.
-- We achieved strong growth in the Local Internet market,
bolstered by significant contract wins around the globe. Our
emphasis on disrupting the current metro and enterprise
networking model with innovative Optical Ethernet and Personal
Internet solutions attracted attention from both our
enterprise and service provider customers.
-- We established excellent momentum in core IP networking
solutions and services for wireless, circuit to packet
migration and IP/ATM networks for both service providers and
enterprise customers and increased market share in these key
growth segments. Based on the strength of our Succession
Solutions and Global Professional Services organization, we
won a network and outsourcing project estimated to be worth
US$1.4 billion with Cable and Wireless to effect the world's
largest network transformation to a voice over IP network."
"Overall, 2000 was a tremendous year. In addition to extending our market share positions, we established ourselves as having the leading portfolio of Optical Internet, Wireless Internet and IP/ATM core networking solutions supporting the high performance Internet."
Looking forward, Mr. Roth said: "We see continuing strong market demand in our target industry segments. Even with the current economic uncertainty, Nortel Networks, with our global reach and industry leading portfolio, is ideally positioned to continue to outpace the market and gain profitable market share. Our focus on high-growth markets will be balanced with optimizing profitability and driving efficiencies in our business."
Commenting on financial guidance for 2001, Frank Dunn, chief financial officer, Nortel Networks said, "Considering the current economic environment and tightening of capital within the telecom sector, we are projecting growth in revenues and earnings per share from operations(b) in 2001 over 2000 of 30 percent. For the first quarter of 2001, we expect revenues of US$8.1 billion and earnings per share from operations(b) of US$0.16 on a diluted basis. Our views for the quarter and the year are within the ranges we previously communicated. We will continue to focus on optimizing profitability and driving efficiencies in our business in 2001 by eliminating redundancies, managing technology transitions, and streamlining operations and activities that are not aligned with our core markets and strategies."
Revenue Breakdown
Segment revenues for the fourth quarter of 2000 increased 39 percent for the Service Provider and Carrier segment and increased 16 percent for the Enterprise segment over the same period in 1999. For 2000, Service Provider and Carrier segment revenues increased 53 percent and Enterprise segment revenues increased 8 percent compared to 1999.
Service Provider and Carrier segment revenues reflected strong growth in Optical Internet solutions in the United States, Europe, Canada and Asia in the quarter. Revenues from mobility solutions and core switching reflected strong growth in the quarter in the United States, Canada, Europe and Asia, more than offsetting a decline in Latin America. High Speed Local Internet revenues declined in the quarter in the United States, partially offset by growth in all other geographic regions. For 2000, revenues reflected strong growth in Optical Internet and mobility solutions in the United States, Europe and Latin America and strong growth in core switching sales in the United States, Europe, Latin America, and Asia. High Speed Local Internet sales grew in Asia, Europe and Latin America for the year more than offsetting a decline in the United States and Canada.
Enterprise segment revenues grew in the quarter due to growth in revenues from eBusiness applications solutions sales and the consolidation of certain joint ventures beginning in January 2000. For 2000, overall Enterprise segment revenues grew due to the consolidation of the joint ventures. eBusiness applications solutions sales grew in the United States, Europe and Asia more than offsetting a decline in voice and data networking infrastructure solutions in the United States, for both the quarter and the year.
Geographic revenues for the fourth quarter of 2000 compared to the fourth quarter of 1999 increased 39 percent in Canada, 38 percent outside the United States and Canada, and 32 percent in the United States. For 2000, revenues increased 47 percent outside the United States and Canada, 42 percent in the United States and 16 percent in Canada compared to 1999.
Expenses
Selling, general and administrative ("SG&A") expenses(c) in the fourth quarter of 2000 were US$1.64 billion, or 18.6 percent of revenue, compared with US$1.19 billion, or 18.1 percent of revenue, in the same period of 1999. For 2000, SG&A expenses were US$5.70 billion, or 18.8 percent of revenue, compared with US$3.95 billion, or 18.5 percent of revenue, for 1999. The increased SG&A expenses in the quarter reflected investments to support Nortel Networks global growth.
Research and development ("R&D") expenses were US$1.13 billion, or 12.8 percent of revenue, in the fourth quarter of 2000, compared with US$814 million, or 12.4 percent of revenue, in the same period of 1999. For 2000, R&D expenses were US$4.01 billion, or 13.2 percent of revenue, compared with US$2.99 billion, or 14.1 percent of revenue, for 1999. The increased R&D expenses in the quarter reflected planned expenses in Optical Internet solutions, mobility solutions, high performance network architecture and eBusiness applications solutions. |
