Replies to post #396702 on Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

Nortel swings to quarterly loss-LOSSES AGAIN
Financial reporting now up to date
By Carolyn Pritchard, MarketWatch
Last Update: 8:03 AM ET June 1, 2005

SAN FRANCISCO (MarketWatch) -- Nortel Networks Corp. swung to a loss in the first quarter, according to a filing with the Securities and Exchange Commission late Tuesday. The Canadian communications and networking equipment giant lost $49 million, or a penny a share, in the period ended March 31. That compares with net earnings of $59 million, or a penny a share, in the same period a year earlier.

The results included restructuring-related charges of $21 million. Analysts surveyed by Thomson First Call had been expecting adjusted breakeven results, on average. Revenues in the quarter rose to $2.54 billion from $2.44 billion, exceeding the average analyst forecast of $2.52 billion.

The results bring the company's financial reporting up to date. "I am pleased that we are now current with our financial reporting; this is an important milestone for Nortel as we move forward with our strategic plan," said Chairman Bill Owens.

For the remainder of 2005, Nortel expects "continued growth in revenues compared to 2004." Nortel (NT: news, chart, profile) also forecast gross margins of 40% to 44% of revenue for the period, while operating expenses as a percentage of revenue are expected to be about 35% by the end of the year.

Shares of Nortel ended Tuesday's session down 7 cents on the New York Stock Exchange, at $2.59, and traded unchanged during the after-hours session.

Morgan Stanley followed by reiterating its overweight rating on the stock despite the mixed results.

"The initial reaction to results may be tepid, as indicated by little change in shares after hours, but we think the quarter is good enough to get the stock working over time," said Analyst Scott Coleman. "Going forward, we expect improving wireless and enterprise sales and stable wireline to boost margins in 2005."