Nortel Networks announced results for the fourth quarter and audited results for the year 2006

March 16, 2007

2 Min Read

TORONTO -- Nortel Networks(1) Corporation's (Toronto:NT.TO - News)(NYSE:NT - News) continued focus on growth initiatives and organizational simplification delivered measurable operational and financial progress as the Company today announced results for the fourth quarter and audited results for the year 2006. These results were prepared in accordance with United States generally accepted accounting principles in U.S. dollars.

"A relentless focus on execution in 2006 delivered solid progress on our Business Transformation plan and laid the foundations upon which Nortel will build its future. I am particularly pleased with the progress made in the fourth quarter as we grew revenues by 10 percent, grew our backlog, and improved operating margin and operating cash flow performance. In fact, the fourth quarter operating margin, was the highest in eight quarters and the operating cash flow performance for 2006 was the best since 1998," said Mike Zafirovski, Nortel president and CEO. "We are 100% focused on the future and are taking the necessary steps to reduce costs, grow revenues faster than the market in key next-generation solutions and position the Company for profitable growth. There is a significant amount of work left to be done, but today Nortel is stronger than it has been in years."

Fourth Quarter 2006 Results

Revenues for the fourth quarter of 2006 were $3.32 billion. Nortel achieved year over year revenue increases of 10 percent in the quarter and 14 percent sequentially as it continued to drive its core strategy and expand its business through growth in our strategic priority areas of the Transformed Enterprise, Next Generation Mobility and Convergence, and Services and Solutions.

(i) Operating Margin is a non-GAAP measure defined as Gross Profit less SG&A and R&D expenses divided by Revenue (see Consolidated Statements of Operations attached to this press release). The Company believes that operating margin is a meaningful measurement of operating performance.

Net loss in the fourth quarter of 2006 was $80 million, or $0.19 per common share on a diluted basis, included a gain of $164 million on the sale of assets, a shareholder litigation expense of $234 million reflecting a mark-to-market adjustment of the share portion of the global class action settlement and special charges of $29 million for restructuring. The net loss in the fourth quarter of 2005 was $2,286 million, which included a litigation expense of $2,474 million, a tax benefit of $134 million and special charges of $24 million. The net loss in the third quarter of 2006 was $63 million, which included a benefit of approximately $43 million related to the announced changes to the North American employee benefit plans, a gain of $15 million on the sale of assets, a shareholder litigation expense of $38 million and special charges of $22 million.

Nortel Networks Ltd.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like