Mixed Guidance at Nortel

The first quarter looks soft, but the year should show solid gains.
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guided lower for the first quarter but said it expects to see "strong revenue momentum" for the full year.

The company said it expects its first quarter ended in March to show a slightly wider loss than last year on flat to slightly lower revenue. Analysts surveyed by Thomson Financial were looking for a break-even quarter, against a year-ago loss of a penny a share, and a 2% year-over-year revenue gain to $2.59 billion.

But if the quarter is going to be soft, Nortel hopes to make up lost ground later in the year.

"We expect strong revenue momentum for the rest of 2006, resulting in high single-digit growth for the full-year 2006 compared to 2005," finance chief Peter Currie said. "For the full year, we expect gross margin to be around 40% as a percentage of revenue and operating expenses to be flat to up slightly from 2005, with foreign exchange and growth-related expenses off-setting productivity and efficiencies."

Nortel said it expects to make first-quarter regulatory filings no later than the week of June 5.