Feeds

Nortel earnings slide 75 per cent

'Stabilised the business'

  • alert
  • submit to reddit

Build a business case: developing custom apps

Troubled telecom equipment maker Nortel has posted a 75 per cent drop in profit in its fourth quarter.

The Canadian-based company's delayed fourth quarter earnings come as it gradually gets its books back in order after an accounting scandal that led to several restated results, a regulatory investigation and the firing of a number of executives.

Revenues were $2.62bn for Q$ 2004, compared to $3.27bn a year earlier. Net profit fell significantly from $133m, or $0.03 per diluted share, down from $528m, or $0.12 per share, a year earlier - a drop of 75 per cent. Revenue and per share earnings for the quarter were above Wall Street analysts' estimates of $2.51bn and $0.01 respectively.

Revenues dropped in all of Nortel's segments, including its wireless division, which saw earnings drop 11 per cent year-on-year to $1.28bn. Wireline networks revenues fell 19 per cent to $461m. Similarly, enterprise networks revenues totalled $651m, down 31 per cent from the year-ago quarter, while earning in the optical networks division dropped 28 per cent to $226m.

Despite the poor results, Nortel was pleased that the accounting issues of the past quarters had been resolved and was bullish about the future.

"I am proud of the progress we made during the past year, delivering solid performance in our core businesses through extremely unique and challenging circumstances," said Bill Owens, vice-chairman and chief executive officer of Nortel. "Our message is clear: Nortel is playing to win. In the past year, we've stabilised the business and laid the groundwork to move forward with velocity."

The company also posted its delayed 2004 audited results on Monday. For the year 2004 Nortel reported a loss of $51m, or $0.01 per share, compared to a profit of $434m, or $0.10 per share in 2003. Revenues were also down in 2004 to $9.83bn compared to $10.19bn for the year 2003.

"We remain focused on our core businesses and positioning Nortel to grow our revenues by leveraging our leading portfolio of next-generation solutions, capitalising on high growth markets in Asia and new opportunities in federal systems, security and services," said Owen. "Specifically we expect strong growth in our voice over packet, third-generation wireless, metro optical, wireless LAN and converged network solutions, coupled with new customer builds and network expansions. We continue to expect the demand for our mature solutions will decline."

With the fourth-quarter and 2004 audited financial results filed with regulators, Nortel is almost up to date on its filings and, if all goes to plan, it will become current with regulators in Canada and the US when it files its 2005 first-quarter results towards the end of May.

© ENN

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.