Nortel Networks Looking to Turn it Around
Asked in advance of Nortel Networks’ quarterly report how he feels about the company’s performance these days, one analyst shoots back: “They stink!”
Who could blame him? For the better part of four years, the telecom-equipment maker has disappointed Wall Street with a steady supply of red ink, accounting fiascos, shareholder lawsuits, regulatory investigations, and multiple firings of top executives.
But perhaps Nortel (NT) is starting to put all that behind it. The embattled company reported on Nov. 6 that it earned $27 million in the third quarter—a turnaround from the $63 million loss suffered over the same three-month period in 2006.
While revenues fell, a closer look also offers encouragement. Third-quarter sales totaled $2.7 billion, falling 7.6% from the year-ago tally of $2.9 billion. But the year-ago numbers include revenue from a cellular business Nortel sold in late 2006. After excluding that unit’s sales from the 2006 figures, third-quarter revenue was down just 2% from year-ago levels. And for the first nine months of 2007 revenues are actually 2% higher if the sold division’s results are excluded.
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