WSJ.com - Nortel's Profit Jumps As Revenue Rises 10%
Online Journal E-Mail Center
August 8, 2005 -- 2:22 p.m. EDT
Nortel's Revenue Rises 10%
Nortel Networks posted a higher profit, as revenue
rose 10% and the telecom equipment maker continued to curb expenses. Shares
surged.
full story below TODAY'S MARKETS
STOCKS LAST CHANGE
Dow Jones Industrials 10538.13 -19.90
Nasdaq Composite 2167.57 -10.34
MS Hi-Tech 502.28 0.10
CBOE Tech 198.71 0.07
Source: Reuters and Dow Jones * At close
Note: Closing quotes are preliminary
(Wall Street Journal Online subscription required)
Techs Stall Amid Mergers, Earnings
Tech stocks stalled Monday, as acquisition
news and rumors competed with rising oil prices for investors' attention.
Merger talk lifted shares of Yahoo and Nokia.
E*Trade to Acquire Harrisdirect
E*Trade agreed to acquire the Harrisdirect
online-brokerage business of Bank of Montreal, accelerating the
consolidation of the U.S. Internet-investing industry.
Broadband For Low-Income Homes
A nonprofit group led by Robert Rubin plans to
invest $1 billion over five years to build rental homes with broadband
access for low-income people.
Marconi Confirms Takeover Talks
Marconi confirmed it is in takeover talks with
unnamed third parties, although it cautioned that it was too early to say
whether the discussions could lead to a deal.
FCC Ruling Fuels Web-Access Debate
As more Americans turn to broadband, the power
of the phone and cable companies has grown, fueling a debate between
broadband firms, which are capable of blocking Web sites from their
customers, and producers of content.
WorldSpace Offer May Carry Risk
WorldSpace rocketed into orbit during its
recent IPO. But the company's prospectus has some curious risk factors,
including key investors' disputed ties to terrorism.
WorldCom's Vinson Gets Jail Term
Betty Vinson, a former WorldCom manager who
pleaded guilty to accounting fraud, was sentenced to five months in prison
and five months of house arrest. Troy Normand, another former manager,
received no prison time.
AOL Buys Mobile Software Firm
America Online acquired closely held Wildseed,
a maker of cellphone software. Terms weren't disclosed.
Dell Releases Desktop With Nvidia Chips
Dell released an unusually powerful desktop
computer for computer gamers, exploiting chips from Nvidia.
FULL STORY Nortel's Profit Jumps
As Revenue Rises 10%
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
Nortel Networks Corp., the Canadian
telecommunications-equipment maker struggling to recover from an accounting
scandal, posted a higher second-quarter profit as revenue rose 10%.
The sales growth heartened investors who were worried
about the company's turnaround efforts. Shares of Nortel rose 33 cents, or
12%, to $2.98 in midday trading on the New York Stock Exchange.
The company said its quarterly income grew to $45 million,
or one cent a share, from $16 million, or break even a share, a year ago.
The latest results included charges of $90 million from restructuring
activities and $39 million for the sale of businesses and assets, as well as
adjustments from prior quarters that reduced earnings by about $40 million.
Revenue rose 10% to $2.86 billion from $2.59 billion last
year, driven by a 26% increase in business networks revenue to $730 million.
Analysts surveyed by Thomson Financial expected earnings
of one cent a share on revenue of $2.69 billion.
Aside from its accounting problems, Nortel has been
battling intense competition in the telecom-equipment industry. In reaction
to the competitive environment, Nortel has been slashing costs and seeking
to preserve cash. The company reported a gross margin of 43%, in line with
its expected range of 40% to 44%.
"This quarter's improved financial performance and
positive momentum is proof that Nortel is strong, our business is building
and our results are heading in the right direction," said Chief Executive
Bill Owens in prepared remarks.
The company said it expects full-year revenue to grow
about 10% from $9.83 billion a year ago, with gross margins in the range of
40% to 44% of revenue. Analysts estimate earnings of six cents on revenue of
$10.58 billion.
Nortel Chief Financial Officer Peter Currie told analysts
Monday that the company's sales, general and administration expenses during
the quarter included about $59 million related to financial restatements.
Accounting problems prompted the firing of CEO Frank Dunn,
Chief Financial Officer Doug Beatty and controller Michael Gollogly in April
2004, as well as seven other senior executives in the finance hierarchy
later that year.
In June, Nortel surprised investors when it announced the
departure of two recently hired top executives. Gary Daichendt resigned as
president and chief operating officer three months after being hired, while
Gary Kunis resigned as chief technology officer two months after joining the
company.
Write to the Online Journal's editors at
newseditors@wsj.com
(Wall Street Journal Online subscription required)
Looking for the Lost Music
Real Time, by Tim Hanrahan and Jason Fry:
Readers voiced their frustrations with artists and
albums missing from the legal digital-music services, and offered their own
want lists. So we launched a digital search party for the lost.
* * *
. Portals: Can You Hear Me Now?
. Linux Users Demand More Features
. Watching the Web: Training Wheels Online
For Traders
advertisement
E-MAIL SIGN-UP
Don't miss the latest analysis on breaking news and trends in
the tech world. Sign up to receive our technology columns. Check the boxes
below to subscribe.
Personal Technology
Real Time
Portals Exchange
To view all or change any of your e-mail settings, please visit
the E-Mail Center.
FREE U.S. QUOTES
Symbol Name
Three great ways to get
ONLINE
Start a FREE two-week trial of the Online Journal
PRINT
Get Free Weeks of The Print Journal
MOBILE
Get up-to-date headlines on the go
FOR FURTHER ASSISTANCE, please contact Customer Service at
1-800-369-2834 or 1-609-514-0870 between the hours of 7 a.m. and midnight
Eastern Time Monday - Friday or e-mail onlinejournal@wsj.com.
--------------------------------------------------------------------------
Copyright 2005 Dow Jones & Company, Inc. All Rights Reserved.
Privacy Policy
Contact Us
.
|
