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Nortel Falls Short in Q2

Nortel Networks Ltd. stock dipped more than 3 percent in pre-market trading this morning after it reported second-quarter revenues of $2.56 billion and a net loss of $37 million, or 7 cents per share. (See Nortel Reports 2Q07.)

Wall Street had been expecting revenues of $2.75 billion and earnings of 8 cents per share. Nortel's stock dipped by $0.73 cents, more than 3 percent, to $21.01 in pre-market trading this morning.

Gross margin was 41.1 percent (the highest in 2 years), compared with 38.4 percent a year ago.

Revenues in the Carrier Networks business unit were $1.06 billion, down 16 percent compared with a year ago, but up 5 percent sequentially. That number was hit by the sale of Nortel's 3G access business -– without that impact, carrier networks revenues are down 5 percent compared with last year. (See Alcatel Snags Nortel 3G Unit.)

The Global Services business was also hit by the sales of the UMTS access unit. Its second-quarter revenues were $494 million, down 9 percent compared with a year ago. Excluding the impact of the 3G business sale, services revenues were down by year on year.

The Enterprise Solutions unit reported revenues of $590 million, up 23 percent from a year ago.

Nortel is hosting a conference call today, during which it will provide further details.

— Ray Le Maistre, International News Editor, Light Reading

LEDzeppelin 12/5/2012 | 3:04:23 PM
re: Nortel Falls Short in Q2 I've no names since I've never worked at Nortel but I'm a past Nortel investor that has analyzed their R&D expenses compared to the industry average and the numbers speak volumes.
boozon 12/5/2012 | 3:04:25 PM
re: Nortel Falls Short in Q2 LEDzeppelin:
change the R&D leaders...who would you start with?
LEDzeppelin 12/5/2012 | 3:04:27 PM
re: Nortel Falls Short in Q2 Z never ran a company before. It shows. Sending out positive corporate emails will not save Nortel. Changing (i.e. replacing) the aging R&D leaders will.
Stevery 12/5/2012 | 3:04:31 PM
re: Nortel Falls Short in Q2 Need I say more?

Yeah, but I'm bummed. To me, Z looked like he had a real shot at navigating that overgrown supertanker of a company in a different direction. I'm still hoping.

Anyone want to comment on the state of the house cleaning?
LEDzeppelin 12/5/2012 | 3:04:32 PM
re: Nortel Falls Short in Q2 Need I say more?
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