Nortel reported Q4 2008 revenue of $2.72 billion, down 15 percent compared to 2007, and a net loss of $2,135 million, or $4.28 per common share on a basic and diluted basis. The net loss included a non-cash write-down of goodwill of $1,237 million and a non-cash charge of $951 million in the fourth quarter to increase the valuation allowance against deferred tax assets.
“The fourth quarter revenues decreased 15 percent as the market continued to deteriorate and customers either reduced or deferred spending. However, strong operating performance focused on customers, costs and cash resulted in meeting or exceeding guidance for management operating margin and cash. The management operating margin was the highest since 2000, key customer performance and quality metrics were also at multi-year highs, and our fourth quarter operating expenses were down 30 percent from the prior year,” said Nortel president and chief executive officer Mike Zafirovski.
Some highlights:
Carrier Networks (CN) revenue in the fourth quarter of 2008 was $1,234 million, a decrease of 8 percent compared with the year-ago quarter and an increase of 50 percent sequentially. Compared to the year ago quarter, CN revenue were impacted by reduced customer spending, decreasing across all businesses, and by the unfavourable effects of foreign exchange. Compared to the previous quarter, results were favourably impacted by the completion of customer contract obligations resulting in the recognition of previously deferred revenues.
Enterprise Solutions (ES) revenue in the fourth quarter of 2008 was $535 million, a decrease of 30 percent compared with the year-ago quarter and a decrease of 13 percent sequentially. Compared to the year ago quarter, ES revenues were negatively impacted by lower volumes in all businesses and geographies and unfavourable effects of foreign exchange.
Global Services (GS) revenue in the fourth quarter of 2008 was $530 million, a decrease of 12 percent compared with the year-ago quarter and an increase of 5 percent sequentially. The fourth quarter declined primarily due to lower associated sales volumes in other business segments and unfavourable effects of foreign exchange.
Metro Ethernet Networks (MEN) revenue in the fourth quarter of 2008 was $371 million, a decrease of 14 percent compared with the year-ago quarter and an increase of 17 percent sequentially. The year-over-year decrease in revenue was primarily due to reduced customer spending and unfavourable effects of foreign exchange, partially off-set by continued momentum in next-generation optical sales.
http://www.nortel.com
