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

To: William Hunt who wrote (11137)	7/19/2001 10:15:39 AM
From: Harry J.	Respond to of 14638

Thread - Tellium, a teensy ($120s of millions(US) in annual revenue right now) NT competitor allowed its CEO, Harry Carr, to speak on CNBC's Squawk Box this AM. It makes optical switches, primarily, was started by some Bell Labs expatriots, and lives in New Jersey. While the TELM 2Q earnings announcement (extract from it appears below) came out yesterday and shows TELM as really small, the CEO said this AM that they have a $BILLION in backlog orders with Qwest, etc., for their equipment. They compete with NT, Ciena, etc. I realize the backlog equals only about a 20th of the expected NT inventory writedown, but it woulda been nice if NT had been able to win this business. Regards, Harry J. PS - I hold some NT long (although I did sell some recently to offset early 2001 STGains elsewhere) and own no TELM. Just thought you'd like to see what a teensy competitor is doing. Extract follows: ---- TELLIUM REPORTS SECOND QUARTER 2001 RESULTS Revenues of $30.4 Million Reflect 95 Percent Growth Over Preceding Quarter Second Quarter Highlights · Revenues of $30.4 million – up 95 percent sequentially. · Gross margins before non-cash charges increase to $12.8 million, or 42 percent of revenues. · Initial public offering of common stock, raising net proceeds of $139.8 million. · Qwest agrees to expand multiyear strategic relationship with Tellium. · Tellium and NEC enter into joint marketing and development agreements. · First deliveries of Aurora 128Ô; preview of Aurora Full SpectrumÔ all-optical switch. · Successful demonstration of interoperability with products from other industry leaders. OCEANPORT, N.J., July 18, 2001 – Tellium, Inc. (Nasdaq: TELM), provider of the world’s first in-service intelligent core optical switch, today reported its results for the second quarter of 2001, its first quarterly results as a public company. Revenues were $30.4 million during the quarter, an increase of 95 percent over Tellium’s first quarter 2001 revenues of $15.6 million. On a pro forma cash basis (before non-cash charges related to equity issuances , stock-based compensation expense, depreciation, and amortization), gross margins rose to $12.8 million in the second quarter of 2001, or 42 percent of revenues, increasing from $6.3 million, or 40 percent of revenues, in the first quarter of 2001. [snip]

To: William Hunt who wrote (11137)	7/19/2001 3:20:19 PM
From: Stocker	Respond to of 14638

Here's the offsetting article to Scott Mortiz's "Silver Lining" article.... Just Say No to Nortel By Adam Lashinsky Silicon Valley Columnist 7/19/01 7:23 AM ET One could argue that it's time to buy Nortel (NT:NYSE - news - commentary) because the stock, at $7.58, is 91% below its 52-week high. But that would be a mistake. Unless you're clairvoyant, it's impossible to say when the situation will improve for the beleaguered telecommunications equipment company, which is burning through cash faster than a gambler at Atlantic City on payday. In June, the company said it will sustain operating losses of $1.5 billion in the second quarter on revenue of about $4.5 billion. Before accounting for money raised from financing, Dain Rauscher analyst John Wilson estimates that Nortel burned through $2 billion in cash this quarter. He estimates that debt rose from $1.3 billion in the first quarter to $3.5 billion in the second quarter. Think that's a problem? Standard & Poor's does -- Wednesday, it downgraded Nortel's long-term corporate credit and senior unsecured debt ratings three levels to "BBB" from "A," and its short-term corporate credit and debt ratings to "A-2" from "A-1." Not turned off yet? Optical-component industry leader Corning (GLW:NYSE - news - commentary) recently said a recovery could be as far as 18 months away. Nortel is looking for a CEO to replace John Roth, and Anil Khatod, the company's chief strategy officer, recently resigned. The bottom line is that Nortel is running out of cash and is unable to say when it will be profitable again. It had $1.7 billion in cash at the end of the first quarter but burned through $2 billion in the quarter. It has a $2 billion credit line, so short-term liquidity isn't an issue -- unless it starts losing more money than it previously projected. It's worth noting, however, as I did in late June, that Nortel archfoe Cisco (CSCO:Nasdaq - news - commentary) is debt-free, has $17 billion in liquid assets and thus has the power to ruthlessly cut prices against Nortel. Still want to buy this "value" play?