re: Nortel Posts Q1 LossEffective October 1, 2004, we established a new streamlined organizational structure that included, among other things, combining the businesses of our four reportable segments into two business organizations: (i) Carrier Networks and Global Operations, and (ii) Enterprise Networks. We have reviewed the impact of these changes on our reportable segments and concluded that, although certain structural changes were made to reflect this reorganization effective October 1, 2004, we did not meet the criteria to change our reportable segments under Statement of Financial Accounting Standards, or SFAS, No. 131, "Disclosures about Segments of an Enterprise and Related Information" for the 2004 fiscal year. Our operating results on a segmented basis for the new business organizations were not available for review by our chief operating decision maker, as a significant amount of our finance resources were allocated to our restatement activity discussed in greater detail under "Developments in 2004 and 2005".
These two business organizations include four operating segments. The four operating segments are: Carrier Packet Networks, which is substantially an amalgamation of our previous Wireline Networks and Optical Networks businesses; CDMA Networks, which was previously part of Wireless Networks; GSM and UMTS Networks which was also previously part of Wireless Networks; and Enterprise Networks, which remains substantially unchanged from the previous organization. For the first quarter of 2005 these four operating segments will become our reportable segments.
re: Nortel Posts Q1 LossThe following statement by Sanford Bernstein analyst Paul Sagawa summarizes the struggle Nortel is still facing against the revived Lucent. This is on top of its other problems like carrier consolidation and eroding margins that Nortel mentioned.
"One company grew their wireless business 4.5% over the last four quarters, and the other grew wireless 33% over the same time frame," says Sagawa. "One company has lost market share in every one of its main businesses over the past two years, while the other is the fastest-growing supplier of wireless infrastructure in the world."
They have reclassified their revenue segments yet again. I think they are trying to hide the fact that other than wireless, things are dismal.
Prizm