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

To: larry pollock who wrote (10392)	3/23/2001 1:17:45 PM
From: larry pollock	Read Replies (1) \| Respond to of 14638

First Union Securities Reduces Estimates for NT 03/23/01 06:33 AM Source: First Union Securities Company Notes: Visit the CNET Brokerage Center for daily reports from the top Wall Street analysts. Nortel Networks Corporation (NT-NYSE) Earnings Estimate Revised Down Reducing Estimates Rating: 3 Price: $18.19 52-Wk. Rng.: $89-15 Shares Out.: (B) 3.2 Market Cap.: (B) 57.9 Key Points Following our visit to the Optical Fiber Conference (OFC) this week, we are lowering our 2001 EPS estimate for Nortel from $0.65 to $0.50 and revenue estimate from $33.5 billion to $30.8 billion. Given Nortel™s high exposure to legacy SONET technology (we estimate 30-40% of optical revenue in 2000), we believe it will be virtually impossible for the company to grow its optical business this year. We also are hearing about significant pricing pressure in wireless infrastructure. We are now forecasting 2% year-over-year growth for the company, down from 11% previously. Although Nortel™s valuation has come down substantially, it is not at historic lows. Currently it trades about 1.8x 2001 revenue. In 1996, the company traded below 1x revenue. Maintain Market Perform rating. We are looking for signs of an upturn in demand and spending trends among telecom service providers as a catalyst to get more positive on Nortel and the rest of the telecom equipment and optical networking group. Company Description Nortel Networks was the first major telecom equipment company to make serious efforts to broaden its product portfolio in the direction of packet-based networking. Its product heritage is deeply rooted in the legacy circuit-switched environment for voice traffic. It was early in developing first-generation optical systems. These included fiber multiplexers before the SONET and SDH standards were adopted. Once SONET became a standard, Nortel took an active role in bringing equipment based on it to the market. Nortel was active in dense wave division multiplexing (DWDM) in the early 1990s, and since then, has gained substantial market share in DWDM based on early delivery of advanced feature sets. Additional information available upon request. This is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments mentioned. Interested parties are advised to contact the entity they deal with, or the entity that has distributed this report to them. The information has been obtained or derived from sources believed by us to be reliable, but we do not represent that it is accurate or complete. Any opinions or estimates contained in this information constitute our judgement as of this date and are subject to change without notice. First Union Securities, Inc. (icFUSIle), or its affiliates may provide advice or may from time to time acquire, hold or sell a position in the securities mentioned herein. FUSI is a subsidiary of First Union Corporation and is a member of the NYSE, NASD and SIPC. Copyright © 2001 First Union Securities, Inc. FUSI is a separate and distinct entity from its affiliated banks and thrifts. Information contained on this page is provided to CNET directly from the investment firm cited in this report.