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

To: MrsNose who wrote (13668)	1/7/2004 3:34:07 PM
From: Neil H	Read Replies (1) \| Respond to of 14638

Nortel surges on analyst upgrades Verizon contract win worth $300 million to $400 million By Ciara Linnane, CBS.MarketWatch.com Last Update: 3:03 PM ET Jan. 7, 2004 NEW YORK (CBS.MW) -- Nortel Networks shares surged 20 percent Wednesday after the networker won an exclusive contract to supply voice-over-Internet technology to Verizon Communications, garnering a series of analyst upgrades. NEWS FOR NT Nortel rises as contract win brings upgrades U.S. stocks mixed in afternoon trade NDCHealth, Nortel, Sirius Satellite after the bell More news for NT Toronto-based Nortel is to begin enhancing Verizon's service provider and enterprise networks with its so-called VoIP equipment later this year, replacing its own older gear, under terms of the deal, its second VoIP contract announcement in two days. Analyst Gina Sockolow of Buckingham Research estimates the Verizon contract is worth $300 million to $400 million to Nortel in the coming 12 to 18 months, she said. The deal "increases our confidence that Nortel (NT: news, chart, profile) can leverage its strong enterprise relationships with large upgrade deals at service providers," the analyst said. "This is Nortel's second major win with Verizon (VZ: news, chart, profile), including last year's end-to-end wireless win." Buckingham upgraded Nortel's stock to "strong buy" from "buy" and doubled its target price to $10. Wednesday's win comes a day after Nortel announced a $17 million contract to provide Cable & Wireless Cayman Islands with VoIP equipment. In the past few months, Nortel has signed similar deals with Sprint (FON: news, chart, profile), MCI and BCE (BCE: news, chart, profile). "Activity in VoIP has increased substantially in the fourth quarter of 2003 and into 2004," said Merrill Lynch analyst Pat Chiefalo, who raised the stock's rating to "buy" from "neutral." Chiefalo is expecting Nortel's leading position in the VoIP market to become an increasing source of growth for the company, he said. At the same time, he added, its strong position in wireless should enable it grow market share and boost earnings. Michael Urlocker at UBS raised his rating on Nortel to "buy" from "neutral" and upped revenue estimates for 2004 and 2005 to $10 billion and $10.9 billion, respectively, from a prior $9.7 billion and $10.3 billion. "We view the mix shift towards wireless and circuit to packet in 2004 and 2005 as favorable to the long-term operating margin of Nortel given these are higher margin businesses," said Urlocker. Nortel shares were up 96 cents, or 20 percent, at $5.72 in midafternoon trade, having earlier set a new 52-week high of $5.75.