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Nortel Earnings Triple

The telecom supplier matches analysts' estimates.
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second-quarter earnings tripled from a year ago on double-digit gains in enterprise- and wireless-network revenue.

The company, whose stock has been in slow decline for 18 months due to accounting scandals and various business misfires, earned $45 million, or 1 cent per share, in the quarter, compared with earnings of $16 million, or nothing per share, last year.

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The latest quarter included a $90 million restructuring charge, $39 million of costs from asset sales and $24 million of costs related to past-period adjustments.

Revenue rose 10% from a year ago to $2.86 billion. Analysts had been forecasting earnings of 1 cent a share on revenue of $2.70 billion. Looking ahead, Nortel expects 2005 revenue to rise 10% from 2004, a slightly better-than-expected rate, while gross margins should be 40% to 44% in the full year.

The stock rose 18 cents, or 6.8%, to $2.83 early Monday.

In the second quarter, Nortel said, revenue from enterprise networks rose 26% from a year ago to $730 million, while revenue from code-division multiple access networks rose 17% from a year ago to $662 million. Carrier packet networks rose 3% to $743 million, while GSM and UMTS revenue rose 1% to $719 million.

Gross margin was 43% in the second quarter. The company ended the period with $3.06 billion in cash, down from $3.43 billion at the end of the first quarter, reflecting "cash outflow from investing activities" of $409 million.