Nortel earnings rise in 4Q

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Nortel Networks (NYSE: NT) operational profit soared in the fourth quarter.

After market close Tuesday, the network equipment vendor reported earnings of $755 million, or 55 cents per share, excluding one-time events and amortization. Including those items, Nortel earned $417 million, or 30 cents per share.

Shares of Nortel rose 5 to 105 in Tuesday's regular trading prior to the earnings report.

Nortel recorded costs of $177 million to amortize goodwill in the fourth quarter. It wasn't immediately clear if First Call's consensus estimate of 45 cents per share excluded goodwill writedowns under Canadian generally accepted accounting principles, although First Call's director of research, Chuck Hill, said the consensus figure appeared to include costs of amortization.

Under U.S. GAAP, the estimate was 41 cents per share with Nortel reporting a profit of 43 cents, excluding amortization, which was higher under U.S. accounting rules.

Fourth quarter revenue rose 21 percent to $6.99 billion from $5.77 billion in the year ago period, when Nortel earned $477 million, or 36 cents per share.

Also Tuesday, Nortel said its board had approved a 2-for-1 share split, its third such split in 24 months, Roth said.

Carrier revenue rose 31 percent year-over-year, on strength in optical equipment and high-speed Internet access business. Enterprise sales fell 5 percent as data networking sales dropped.

Revenue outside the United States and Canada improved 30 percent in the fourth quarter, while rising 20 percent in the United States and falling 12 percent in Canada.

For the full year 1999, Nortel earned $1.73 billion, or $1.28 per share, on revenue of $22.22 billion, excluding writedowns and special charges.

"We knew we were going to do well, but we actually did a little better than we thought we would," Nortel Chief Executive John Roth told Reuters. "Our order input in the quarter has been extremely strong, setting us up in great shape for the beginning of the year 2000."

Among 30 analysts surveyed by Zack's Investment Research, 26 maintain some sort of "buy" rating.