Nortel still under pressure


By now you would have thought that Nortel Networks would be out of its misery. Not so, and even mostly biased Canadian institutions are not too thrilled about the future of Nortel Networks.

bq. The massive downsizing completed by Nortel Networks Corp. last year has eased concerns about its cash resources but the outlook for future revenues remains uncertain, Dominion Bond Rating Services. [The Globe and Mail]

With telecom spending stuck in neutral, there is little likelihood of Nortel coming out of this swoon anytime soon. The company has cut a whopping 60,000 jobs.

bq. With any growth still a year or so away, Nortel will need to operate on a break-even basis until conditions improve. This will mean maintaining quarterly revenue near $2.4-billion (U.S.), with gross margins over 40 per cent, Dominion Bond said in its release.

On the bright side, I think Nortel’s wireless business is going to say the company in the long run. Ironically that is one business, Nortel keeps under covers.

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