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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (40703)	2/18/2004 8:34:54 AM
From: xcr600	Read Replies (1) \| Respond to of 69211

Wow RMBS now up 40% premarket! edit- time to gator wrestle shorted some 36.15

To: Johnny Canuck who wrote (40703)	2/18/2004 11:25:46 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69211

Nortel CEO Sees Fewer Equipment Vendors In 12-18 Mos Wednesday February 18, 10:07 am ET TORONTO (Dow Jones)--This time it will be different, predicts Frank Dunn, Nortel Networks Corp. (NYSE:NT - News)'s chief executive. Many had expected the extended slump that equipment vendors faced in their businesses between 2000 and 2002 to trigger large-scale consolidation among the equipment vendors but "for all intents and purposes, that didn't happen," Dunn said in response to a question at Nortel's annual investor day Wednesday in Boston. However, citing the Cingular Wireless' planned acquisition of AT&T Wireless Services Inc. (NYSE:AWE - News) , and expectations of further consolidation among big telecom carriers globally, Dunn now predicts that over the next 12 to 18 months there "will be less (network equipment) vendors in the industry." That said, mergers won't necessarily be the driving force behind this expected move. "I'm not saying (the vendors) are all going to merge; I'm just going to say the vendors in the industry are going to decide what business to be in and which ones not to be in or maybe decide to merge or do something to refocus," the executive said. He said Nortel may make acquisitions, but he also stressed that Nortel is placing more emphasis on partnering with other vendors rather than making a lot of acquisitions to service Nortel's customers. "The game of today is about working with world-class partners in the industry...to service your customers," Dunn said. "If someone thinks that the only way (to best serve the customers' needs) is to acquire every company that you need, I think that is a very dangerous game," Dunn said. Nortel made a number of high-priced acquisitions in the late 1990s to get access to different types of gear, but ended up taking big writedowns in connection with many of these transactions. In this environment, Dunn expects Nortel to face significant price competition, hence the company's conservative outlook for gross margins over the short term. "People are going to be fighting to the death right now deciding what strategy" to employ, and that's going to put pressure on margins over the short term, Dunn said. Nortel's costs to support customer adoption of its newer wireless and wireline technologies will also weigh somewhat on margins over the short term, Dunn said. In the fourth quarter, Nortel reported gross margin of 48% of sales. However, it forecast that it expects gross margins to trend around the mid-40% level over the near term. However, over the longer term, gross margins should trend higher, Dunn also reiterated. Company Web Site: nortelnetworks.com