Nortel Spots the Tip of the Optical-Slowdown Iceberg

To some eyes, Nortel's (NT Quote) oddly timed earnings and revenue warning Wednesday looks like the tip of the iceberg for a cooling optical-networking sector.

The Nortel Plunge Charting optical networker's descent

Sanford Bernstein analyst Paul Sagawa says the optical stalwart's move to trim first-quarter growth targets illustrates a much larger problem: Even the strongest companies in this pricey sector have an increasingly tenuous grasp on just how much product their customers will be able to afford in the next year. The cash crunch that the network builders are facing is fueling a spending slowdown that could affect any company -- even ones that have executed flawlessly -- soon. ...