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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Sharck who wrote (16273)	4/15/2001 2:07:28 PM
From: pprincesss	Respond to of 37746

Nice apologies!!!!! LOL Nortel Networks operating losses may continue through midyear: analysts GILLIAN LIVINGSTON TORONTO (CP) - Nortel Networks will post a first-quarter operating loss of up to $360 million US - its first in years - and industry watchers expect Canada's premier technology company will continue to lose money as it adapts to slower telecom spending. "I see what the size of the loss is expected for the first quarter, and quite frankly it may be difficult for them to post positive earnings in the second quarter because they might still be in an adjustment phase," said David Heger, an analyst with A. G. Edwards & Sons in St. Louis. "It could possibly be the second half of the year before they can break through to positive earnings again." Over the past several years the telecommunications equipment giant has produced massive net losses - $3 billion US in 2000 - due to writeoffs from acquisitions, but it has reported profits from day-to-day operations. Nortel, which will report its first-quarter results Thursday, warned at the end of March that it expects an operating loss of 10 to 12 cents US a share - deeper than it had said in February. With about three billion shares outstanding, that puts its operating loss at $300 million to $360 million US. Revenue will slacken to about $6.2 billion, as telecom companies reduce or defer capital spending or demand cheaper products, said Nortel, which reports in U.S. dollars. That's a sharp contrast to the year-earlier period when revenue rose 48 per cent to $6.32 billion and earnings from operations were $347 million. It's also a huge shift from the fourth quarter of 2000, with revenue of $8.82 billion and operating earnings of $825 million. "The very fact that Nortel earnings can melt that fast, I think, should hopefully open some investors' and analytical eyes to take a much closer look at this company," said Ross Healy, president of Strategic Analysis Corp. "It calls into question just how fundamentally and basically profitable Nortel actually is." It won't be a surprise if the company has an operating loss for the second quarter, Healy said. "With a strong downturn, that downturn didn't end abruptly on March 31," he noted. "One would indeed expect that there would be some downward momentum into the second quarter which would make the second quarter even potentially worse than that." Investors may also see a deterioration in the fibre-optic leader's balance sheet. An unknown is whether Nortel will take writedowns on financing it provided to some customers, Heger said. Some small telecom carriers could run out of cash in the near future, causing lenders, such as Nortel, to be forced to account for that on their books. Analysts and investors, who have seen the company's share price dwindle by about $100 from last year's peak to the $25 Cdn range, will be listening closely to what CEO John Roth expects over the next few months. However, they may not hear much. In late March, Roth refused to give a forecast for the year because he said it was too tough to tell how long the downturn would last. Nortel has been cutting costs, but some say it hasn't done enough, emphasized by the first-quarter loss. The company will cut 15,000 jobs by the end of the year, and has told employees to reduce expenses. Heger said in the last year Nortel boosted staff, partly through acquisitions, and raised component production capacity in expectation of continued strong growth. Now it has to retrench radically. "I'm just afraid that's going to take several quarters to work through," Heger said. "It's going to be a challenge for them to move as quickly as possible to wind back the cost structure to be in line with a lower revenue base than what they had previously thought." He added: "I'd like to hear - besides job cuts - what else they're doing to adjust the cost structure down." Cost-cutting combined with an improved market in the latter half of the year might move Nortel back to operating profitability by year-end, Heger said. The last full year it had an operating loss was 1993, when it lost $878 million US. It returned to profitability after cutting about 5,200 jobs and closing several plants, and some observers say it is poised to repeat this turnaround. Said Chet White, an analyst with Wells Fargo Van Kasper in Long Beach, Calif.: "The underlying factor of why Nortel will eventually, in our opinion, return to profitability and get back on its feet is that they really are the dominant optical networking company in the world."r

To: Sharck who wrote (16273)	4/15/2001 2:08:36 PM
From: pprincesss	Respond to of 37746

Hey Sharky....Happy Easter!!!!! Thanks for those chocolates!!!!!! PP

To: Sharck who wrote (16273)	4/15/2001 5:33:06 PM
From: 2MAR$	Read Replies (2) \| Respond to of 37746

Tight semiconductor market can only get worse - Barron's NEW YORK, April 15 (Reuters) - If Wall Street thought the first quarter was a tough one for semiconductor stocks, the second quarter will "most certainly be worse," according to Alan Abelson, columnist for financial weekly Barron's. Citing recent research on the semiconductor industry from Boston investment research firm Fechtor Detwiler, Abelson argues against the current pervasive sentiment that because semiconductor stocks are now so low there is no place for them to go but up. "The notion suddenly so popular in Wall Street that the absence of any bookings means things can only get better, for some reason, the firm reports, has utterly failed to reassure the sales reps and distributors who peddle the semis and have been wrestling with a 'bigger issue than inventory overhang,'" Abelson wrote. "And, wouldn't you know, someone plumb forgot to inform folks in the chip business that pricing pressure has been eliminated," he added. Abelson also points to the recent hop in technology stocks, led by such top players as Micron Technology Inc. <MU.N>, may have been slightly premature, given that other companies are still reporting problems such as significant price pressures and excess inventory, to name a few, and that those issues are not likely to be resolved in the near future. According to the Fechtor Detwiler reporter, Abelson said, STMicroelectronics NV <STM.PA> has offered to beat any competitor's price and guarantee a 30 percent margin to the distributor, a move that can only hurt related companies like ON Semiconductor Corp. <ONNN.O>, International Rectifier Corp. <IRF.N>, Fairchild Semiconductor International Inc. <FCS.N> and Toshiba Corp. <6502.T> He also notes how, according to Fechtor Detwiler, equipment makers such as Sycamore Networks Inc. <SCMR.O>, Cisco Systems Inc. <CSCO.O>, Nortel Networks Corp. <NT.N> and Lucent Technologies Inc. <LU.N> have "gotten the word from their broadband-carrier customers that prices have to be shaved some 40 percent, or they needn't bother wasting their breath asking for new orders." "In brief, on closer inspection, that 'bottom' in semiconductors appears to be nothing more than an optical illusion, a dreadful side effect, no doubt, of going so long without even a morsel of good news," Abelson wrote. (( -- New York Wired Desk 212/859.1860)) REUTERS * end of story *