Nortel said that second-quarter 2005 revenues came in at $2.86 billion, up 10 percent from the year-ago period. It earned $45 million, 1 cent a share, on a diluted basis. While its profit number was even with analysts' estimates, Nortel beat analysts' revenue expectations of $2.69 billion, according to Reuters Research.
The news appeared to give investors a pleasant surprise, judging from the reaction in the stock -- perhaps because Nortel investors have come to expect the worst after Nortel has suffered a series of accounting missteps, an investigation by the Securities and Exchange Commission (SEC), and some serious executive shuffling. (See Nortel COO Resigns , Nortel Issues Update, Nortel Posts Q1 Loss, Nortel Changes CTO – Again , Nortel Details Q3 '04 Loss, , and Nortel's Retro Quarters .)
Growth in revenues came primarily from Nortel's enterprise networking gear division. Here's the breakdown of revenue in Nortel's various business units:
- Enterprise Networks revenues were $730 million, an increase of 26 percent compared with the year-ago quarter and an increase of 33 percent sequentially.
- The GSM and UMTS Networks division reported revenues of $719 million, an increase of 1 percent compared with the year-ago quarter and a decrease of 9 percent sequentially.
- CDMA Networks revenues were $662 million, an increase of 17 percent compared with the year-ago quarter and an increase of 24 percent sequentially.
- Carrier Packet Networks reported revenues of $743 million, an increase of 3 percent compared with the year-ago quarter and an increase of 12 percent sequentially.
— R. Scott Raynovich, US Editor, Light Reading