Nortel posts first profit in 3 years

Nortel Thursday posted its first profit in 13 quarters on first quarter 2003 results that surpassed analyst expectations.

Revenues were $2.40 billion compared to $2.91 billion in the same period in 2002. Analysts expected revenue of $2.3 billion, according to Thomson First Call.

Net earnings were $54 million, or 1 cent per common share, compared to a net loss of $841 million, or 26 cents per common share, in the first quarter of 2002. Analysts expected a loss of 3 cents per share for the first quarter of 2003.

"I am extremely pleased to have achieved profitability in the first quarter of 2003 and reached our goal one quarter early," Nortel President and CEO Frank Dunn said in a statement.

To continue reading, register here to become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

Nortel Thursday posted its first profit in 13 quarters on first quarter 2003 results that surpassed analyst expectations.

Revenues were $2.40 billion compared to $2.91 billion in the same period in 2002. Analysts expected revenue of $2.3 billion, according to Thomson First Call.

Net earnings were $54 million, or 1 cent per common share, compared to a net loss of $841 million, or 26 cents per common share, in the first quarter of 2002. Analysts expected a loss of 3 cents per share for the first quarter of 2003.

"I am extremely pleased to have achieved profitability in the first quarter of 2003 and reached our goal one quarter early," Nortel President and CEO Frank Dunn said in a statement.

Nortel's Wireless Networks segment revenues decreased 6% from the fourth quarter of 2002 and 16% from the first quarter of 2002. Enterprise Networks revenue also decreased 6% from the fourth quarter and 9% from the first quarter of 2002.

Wireline Networks revenues increased 11% from the fourth quarter, with "considerable" increases in the U.S. and Canada, the company said. But it was down 18% from the first quarter of last year.

Optical Networks revenue decreased 22% from the fourth quarter, with "considerable" decreases in the U.S. and Canada, Nortel said. Optical was down 33% from the first quarter of 2002, the company said.

Geographic revenues for the first quarter of 2003 compared to fourth quarter of 2002 decreased 3% in the U.S. and 9% in Canada, with Europe/Middle East/Africa (EMEA) essentially flat and all other regions down 16%. Compared to the first quarter of 2002, revenues decreased 14% in the U.S., 41% in Canada, 11% in EMEA and 25% in all other regions.

Nortel is not providing any specific revenue or earnings guidance for the second quarter because the company expects the overall telecommunications equipment market to be down modestly in 2003 compared to 2002. Customers continue to spend cautiously, the company says, so capital spending levels in the second quarter are expected to be similar to the first quarter of 2003.