Nortel Q3 in line with guidance

Nortel Thursday posted third quarter revenue and earnings generally in line with previous guidance, though revenue is slightly lower and the loss a little better than expectations.

Nortel Thursday posted third quarter revenue and earnings generally in line with previous guidance, though revenue is slightly lower and the loss a little better than expectations.

Revenue from continuing operations was $2.36 billion for the period ended Sept. 30, a 15% drop from Q2. Analysts were expecting revenue of $2.4 billion for the quarter.

Pro forma net loss for the quarter was $420 million, or $0.10 per share, a penny better than the $.11 per share loss analysts were expecting. Still, the Q3 loss was 30% greater than Q2’s $323 million, or $.09 per share, loss.

For the third quarter of 2001, Nortel posted revenue of $3.69 billion and a pro forma loss of $2.18 billion, or $0.68 per share.

Nortel reiterated plans to pare its workforce to 35,000 by year-end in an effort to further bring costs in line with revenue. Nortel currently employs just under 39,000 workers.

“We continue to monitor the marketplace and align our business and investment priorities to the market and in line with our customers drive for profitable revenues, improved productivity, and reduced cost of operations,” says Frank Dunn, Nortel president and CEO, in a statement. “Despite the continued industry dynamics, our progress on all fronts has been significant.”

Dunn said he expects “ongoing pressure” on customer capital spending to continue into 2003. The company expects to return to profitability by the second quarter of 2003, and have a break-even point in place at that time with quarterly revenue below $2.4 billion.

Dunn also expects sequential improvement in pro forma bottom line results in the fourth quarter of 2002. Compared to the second quarter of 2002, revenue from Nortel’s Wireless Networks business decreased 16%. The Enterprise Networks segment revenue declined 4%, Wireline Networks dropped 17%, and Optical Networks was down 24%.

Compared to the third quarter of 2001, Wireless Networks decreased 30%, Enterprise Networks fell 10%, Wireline Networks dropped 49% and Optical Networks slid 47%.

For the nine months of 2002, revenue from continuing operations were $8.04 billion compared to $14.06 billion for the same period in 2001. Nortel reported a pro forma net loss of $1.21 billion, or $0.33 per share, compared to a pro forma net loss of $4.01 billion, or $1.26 per share, for the same period in 2001.