Nortel’s Q3 profit, excluding charges, soars 63 per cent

Nortel Networks Corp. reported on Tuesday better-than-expected third quarter earnings, and said the outlook for the rest of the year looks strong thanks to interest among carriers and service providers in optical networking equipment and other products.

Earnings excluding unusual items for the quarter ended Sept. 30, 2000, were US$574 million, or 18 cents a share, up from $314 million, or 11 cents a share, in the same quarter a year ago, Nortel said in a statement. Financial analysts had expected the company to profit by 16 cents a share, according to 33 brokers polled by First Call/Thomson Financial.

Revenue for the period soared 42 percent to US$7.31 billion, up from $5.15 billion in the same period in 1999, the Brampton, Ont.-based vendor said.

Including acquisition-related costs, stock option compensation from acquisitions and other unusual items, Nortel reported a net loss for the quarter of $586 million or 20 cents per share.

Carriers and service providers around the world who are deploying wireless, Internet and electronic-business services to their customers are helping Nortel’s business, the company said. Its strong results were driven in part by sales of optical networking equipment, which increased 90 per cent from the same quarter a year ago, and wireless Internet gear, which grew by more than 50 per cent quarter over quarter, Nortel said.

Based on its performance over the first nine months of year and a strong backlog of orders, Nortel said it expects earnings per share for the full fiscal year to increase by 40 per cent compared with fiscal 1999, an improvement over its earlier guidance of profit growth in the high 30 per cent range.

Nortel continues to expect that revenue for the full year will increase by 40 per cent over fiscal 1999.

Nortel’s shares ended the regular trading day at $63.31, down 5.42 per cent from Monday’s close. The financial results were announced after the close of market.

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