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Mark Evans

the blog - examines the world of telecom  and  technology  from  a distinctly Canadian perspective.

the person - lives in Toronto, CA with  his  wife  and  three children, and  works  as director of community with PlanetEye Inc.
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View Article  Nortel Sells UMTS Unit

Nortel has agreed to sell its UMTS unit to - surprise, surprise - Alcatel for $320-million. It was only a matter of time before Nortel sold the money-losing business, and Alcatel seemed to be the most logical buyer. While Nortel can certainly use the $320-million, it is below the expectations of analysts, who were looking for about $500-million. Nortel held a conference call today at 9 a.m. to provide an “update on advances to the execution of its business plan”. According to analysts, Nortel's UMTS access business was losing about $200-million a year on sales of $400-million to $500-million. No wonder Nortel wanted out so badly. With UMTS out of the way, Nortel CEO Mike Zafirovski can now focus on other parts of the business that don't meet his 20% market share benchmark. At the end of the day, Nortel will be a smaller player but, hopefully, profitable.
Update: For more views on Nortel, check out All Nortel, All the Time.

View Article  Nortel: When a Profit is Not a Profit

Nortel posted second-quarter earnings of $366-million this morning, or 8 cents a share (compared with analyst estimates of about 2 cents). Before investors get too excited and storm off to jump on the bandwagon again, the bottom line was nowhere as good as it appears. For one, profits were buoyed by a $510-million gain from shareholder litigation recovery. After accounting for charges related to restructuring and asset sales, Nortel lost about $89-million in the quarter, or about 2 cents a share. Another sign Nortel has yet to recover is a sharp decline in gross margins to 39% from 43%. However, Nortel remains confident the rest of the year will be more promising. CFO Peter Currie said the company exepcts strong sales momentum, high single-digit growth compared with 2005, gross margins of 40%, and operating expenses to be flat to slightly up.

View Article  Show Me the Strategy
My column in today's National Post looks at Nortel's need to spill the beans on where it's headed strategically. CEO Mike Zafirovski has been working away for more than seven months on his corporate makeover, and now analysts and investors want in on his master plan. By the way, Nortel's annual meeting is today.
Update: Here's my story in Friday's National Post on the AGM. It includes some interesting details about some new stock options granted to Mike Z. at a lower strike plan than the ones he received last year when he was hired.
View Article  Nortel Slashing 1,100 Jobs
Surprise, surprise (well, not really), Nortel is cutting 1,100 jobs and reviewing its pension plan. The jobs cuts will reduce annual operating expenses by $100-million in 2007 and $175-million in 2008. The company also unveiled changes to its pension plan from defined benefits to defined contributions contributions to  defined benefits, which will save Nortel about $100-million a year. And everyone wondered why Nortel CEO Mike Zafirovski is so bullish about the company's prospects.
View Article  What Now, Mike Z.?: Part II

For another long drink about Nortel in the wake of the Siemens-Nokia joint venture, check out my story in today's National Post.

My blog has moved. Check out the new Mark Evans. It's on Wordpress and part of my mini-blog empire that also includes All About Nortel You can subscribe to Mark Evans Tech by clicking on the RSS symbol above.
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