Houston, We Have a Business Problem

When your earnings are in the toilet, you've fired enough people to fill an


arena, and you're clueless about your business outlook, speaking at an investment banking conference has got to rank right up there with changing the kitty litter on the fun-o-meter.

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So forgive Brian McFadden, a midlevel

Nortel Networks


executive, for spending an hour at the

JP Morgan H&Q Technology Conference

Thursday playing duck and cover from the Canadian optical gear maker's monumental problems.

McFadden, president of Nortel's metro optical unit, instead gave a perfectly nice technical presentation about Nortel's prospects in the metro optical business.

Granted, analysts believe McFadden's group might just be one of the company's bright spots, if telecommunication carriers start spending money again (a survey released today by

Epoch Partners

analyst Seth Spalding estimated that carriers' capital spending in 2001 would be down from 6% to 15% over last year). But then again, you wouldn't know that from McFadden's chat. He spent so much time at the 100,000-foot level that you'd think he was bucking to replace Dennis Tito as the next business executive in space.

Still, the assembled fund managers tried hard to bring McFadden back to earth. They wanted details, numbers, projections -- anything that would give them a clue how to play this stock. McFadden smiled, rocked on his heels and gave them nothing.

-- Adam Feuerstein

In This Case, No News Means the Same Old Bad News



Gary Pinkham felt no need to perfume a pig.

Speaking to a half-empty room of investors at the JP Morgan H&Q conference, Ericsson's VP of investor relations characterized the wireless-equipment maker's first quarter results as "terrible." He dubbed the company's recent cash flow "horrendously negative." Pinkham had no "sensible outlook" for the second quarter, and dejectedly detailed the loss of market share in the handset business and a 90% drop in income before tax in Q1.


Wait, it gets better. Actually, it doesn't: The second quarter will be just as bad. Pinkham estimated it would take six to 12 months to work through inventory, and seemed to say buildups still might be growing. Inventory backups have caused a 10%-to-15% price drop. On the bright side, Ericsson can hit its 10% operating profit margin goal with no sales growth this year or next -- aim for the mud in front of your snout. Ericsson's major objectives at the moment are "to restructure the business and minimize losses," Pinkham said. "We're not fighting for market share."

-- Tish Williams