Shares of telecommunications giant Northern Telecom moved higher this morning after the company reported a deep net loss after charges for its third quarter, but still managed to beat analysts' expectations for the quarter.
The Canada-based company said it posted earnings from ongoing operations of $241 million or 42 cents a share. A consensus of Wall Street analysts expected the company to earn 37 cents per share, according to First Call. The brokers' estimates ranged from 33 cents to 40 cents.
The company rebranded itself as Nortel Networks after it acquired Bay Networks this year.
Shares of Nortel climbed 2.89 percent or one point to 35.56 on the earnings news. The stock has traded as high as 69.25 and as low as 26.81 during the past 52 weeks.
The company posted a net loss of $306 million or 54 cents per share, including one-time charges and acquisition-related costs. This loss includes $388 million in restructuring charges and $539 million related to the acquisition of Bay Networks. The company also posted a one-time pretax gain of $377 million.
Nortel said that revenues from ongoing operations in the third quarter increased 20 percent, a 12 percent contribution from Bay Networks, compared to the year-ago period. Revenues increased 18 percent to $4.14 billion from $3.5 billion from the year-ago period.
The company said it is optimistic about its outlook for the rest of 1998 and beyond.
"We currently expect to see our 1998 revenue growth from ongoing operations, including Bay Networks, to be in the mid-teens," said Nortel CEO and vice-chairman John Roth. "We remain confident in our ability to deliver earnings in line with our guidance.
"Looking beyond 1998, discontinuities in the telecommunications market, such as deregulation, globalization, the need for mobility, and the impact of the Internet, are creating opportunities for us to provide solutions to both our traditional and new customers globally," he added.