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 NEWSNortel's first-quarter earnings reach $222 million By Nancy Weil , InfoWorld Electric May 3, 1999 Northern Telecom's (Nortel's) first-quarter earnings hit $222 million, or 33 cents per share, excluding costs related to acquisitions, compared to $140 million one year ago, the company announced Tuesday, attributing its growth to substantial new contracts with telecommunications carriers.
Revenue increased 26 percent from one year ago to $4.4 billion for the quarter that ended March 31, the company said. "We're really happy with it," said John Roth, vice chairman and CEO, about the quarterly results. "It was a great start to the year for us." The company was, however, hurt by Brazil's ongoing economic struggle, which affected Nortel's wireless operation. Wireless sales, which are not provided as a separate category in Nortel's financial report, were down in the first quarter, Roth said, adding that the situation in Brazil was a factor. South America accounts for about 5 percent of Nortel's revenue, with Brazil a major part of that percentage, he said. Telephone users in many countries now rely more on wireless service than on wireline because the telecommunications infrastructure for traditional wireline offerings never has been put fully into place, Roth noted. Despite the effect on Nortel's wireless bottom line that was noticed in the past quarter, Roth said that the company expects its wireless service to grow at a rate of 15 percent or more, in pace with industry growth. In the carrier segment of its business, Nortel said revenue increased 15 percent for the quarter compared to one year ago, pushed by increases in optical network systems sales in the United States, Europe, and Asia Pacific. The company's corporate segment saw a revenue gain of 83 percent, largely because of the merger with Bay and growth in LAN switching, the company said. U.S. revenue jumped 37 percent, and revenue related to operations in Canada rose 3 percent. Outside of North America, Nortel revenue rose 15 percent, largely from Asia Pacific and Europe, which helped offset a decrease in Latin America because of economic turmoil in Brazil, the company said. On Thursday at a shareholder's meeting, Nortel is expected to officially change its name to Nortel Networks Corp., a moniker the company already has been using. Northern Telecom Ltd., in Mississauga, Ontario, is at www.nortelnetworks.com. Elinor Mills is a San Francisco editor at large for the IDG News Service, an InfoWorld affiliate. SPONSORED WHITE PAPERS 
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