May 3, 2005

Nortel Networks delivered its fourth-quarter 2004 results yesterday, and while the numbers weren't particularly exciting, the company says it is looking forward to getting back on track after its accounting nightmares.

Nortel reported revenue of $2.62 billion for the fourth quarter of 2004 compared with $3.27 billion for the fourth quarter of 2003.

Net earnings in the fourth quarter of 2004 were $133 million, or 3 cents per common share on a diluted basis, compared with net earnings of $528 million, or 12 cents per common share, in the fourth quarter of 2003.

Wireless networks revenue in the quarter tallied $1.28 billion, a decrease of 11 percent compared with the year-ago quarter.

Cash balance at the end of the fourth quarter was $3.69 billion, which was up from $3.39 billion at the end of the third quarter of 2004.

The company said the increase in cash from the end of the third quarter was primarily driven by cash from operations of $277 million, which included cash proceeds from the sale of certain customer financing notes receivables of $116 million and cash payments for restructuring of about $76 million.

For the year 2004, revenue came in at $9.83 billion compared with $10.19 billion in 2003. Nortel reported a net loss of $51 million, or 1 cent per common share on a diluted basis, for 2004, compared with net earnings of $434 million, or 10 cents per common share, for 2003.

"I am proud of the progress we made during the past year, delivering solid performance in our core businesses through extremely unique and challenging circumstances," Bill Owens, Nortel's vice chairman and CEO, said in a statement.

"In the past year, we've stabilized the business and laid the groundwork to move forward with velocity.

We've taken steps to ensure ethics, integrity and transparency in our financial reporting, strengthened our world-class leadership team by recruiting new talent, and are speeding solutions to market through a partnerships and alliances strategy, while focusing on emerging markets and opportunities."

Going forward Owens said the company remains focused on its core businesses and wants to grow revenue by leveraging its portfolio of next-gen solutions, capitalizing on high-growth markets in Asia and pursuing new opportunities in federal systems, security and services. Among the areas where strong growth is expected are 3G wireless and WLAN.

In the area of next-gen solutions, the company touts its CDMA WLAN converged mobility offering designed to bridge CDMA networks and WLANs.

Nortel shares, trading at $2.46, were down just 1 percent in mid-morning action.

Source: Wireless Week