Nortel: Brazil woes hit wireless business
Although its wireless networking equipment business is suffering from the effects of the Brazilian currency crisis, executives still predict growth for the unit.
In conjunction with Nortel's 1999 first quarter earnings announcement today, the company reported a decline in wireless revenue over the previous year, highlighted by a 50 percent drop in sales from Brazil year-over-year.
"We were down because of the situation in Brazil," said John Roth, chief executive at Nortel, in an interview with News.com. "We have a very large footprint with several customers in Brazil.
"That really hit us pretty hard," Roth said.
Brazil's economy has been hit by an extended currency crisis that has largely halted high-tech investment in the country, especially in information technology (IT).
But Nortel executives believe that a series of wireless equipment orders totaling $1.8 billion this year is indicative of overall health in the wireless equipment segment.
Furthermore, Roth said the company is not losing market share to competitors in Brazil.
Company executives said an annual growth rate in the "mid-teens" remains on track for the year. Nortel expects overall earnings growth of 20 percent for the fiscal year, according to executives.
Nortel gleans about 5 percent of its overall revenues from the Caribbean and Latin American region, according to the company.