Nortel Profits From Asset Sales

Nortel Networks Ltd. , in case you had forgotten, is still in business, and has just reported a fourth-quarter profit of $1.78 billion.

But don't get too excited: That figure includes gains of $689 million from the sale of its enterprise assets to Avaya Inc. and $1.26 billion from the sale of its CDMA and LTE assets to Ericsson AB (Nasdaq: ERIC), which is also involved in the purchase of Nortel's GSM business. (See Ericsson Kickstarts Nortel Integration Plans, Ericsson Buys Nortel's GSM Biz Too, Nortel Wireless Winner: It's Ericsson!, Avaya Unveils Nortel Roadmap, Avaya Closes Nortel Deal, and Avaya's $900M Bid Wins Nortel Auction.)

Nortel's operating loss for the fourth quarter, before all manner of one-time items, charges, and costs were accounted for, came to $106 million from revenues of $794 million. (See Nortel Reports 2009.)

The rest of the numbers are something of a minefield, given that the vendor's 2009 statements still include all sorts of sales related to assets it has agreed to sell or already offloaded.

The most interesting numbers in the pile, though, relate to a few of the business lines that have recently found new homes.

The Metro Ethernet Networks (MEN) division, which was snapped up by Ciena Corp. (NYSE: CIEN), generated revenues of $327 million in the fourth quarter of last year, down 29 percent from a year earlier but up 11 percent on the third quarter. (See Morin's Plan: Stick With Ciena, Gary Smith, CEO, Ci-MEN-a, and Ciena Beats NSN to Buy Nortel's MEN.)

And the carrier VoIP and Application Solutions (CVAS) business that's heading Genband Inc. 's way managed sales of $194 million during the final three months of last year, down 27 percent from the fourth quarter of 2008, and down 7 percent sequentially. (See Courts Approve Genband-Nortel Deal, Genband CEO Sees Opportunity in a Complex Deal, and Genband Bids $282M for Nortel's VoIP Unit.)

— Ray Le Maistre, International Managing Editor, Light Reading