Nortel beats expectations for 2002

27 Jan 2003

Canadian equipment vendor Nortel Networks [Toronto: NT.TO] has released mixed results for the fourth quarter and full year of 2002. The company reported its twelfth consecutive quarterly loss, but promised to return to profit by June 2003 after narrowing its net loss and posting a rise in revenues for the first time in two years. Nortel reported revenues of USD2.52 billion for the fourth quarter, beating analysts’ expectations of USD2.33 billion; revenues were up on the previous quarter by around 7% but down 27% on the same period of 2001. Nortel narrowed its net loss significantly to USD248 million for the quarter from USD1.83 billion in the same period of 2001 and said it expects to achieve profitability by the second quarter of 2003, predicting a weak first quarter as customers continue to restrict their spending. For the full year 2002 the company posted a net loss of USD3.59 billion, a significant improvement on 2001 when losses reached USD27.3 billion. In the last three months of 2002 Nortel’s wireless equipment sales increased by around 8%, enterprise equipment sales grew by 6%, wireline infrastructure sales by 5% and optical gear revenues by 11%. The company had a strong cash balance of around USD4.11 billion at the end of the year, including USD249 million of restricted cash, beating its own expectations of USD3 billion.