Highlights:
- Q3 revenues of $2.96 billion, up 17 percent year over year
- Q3 net loss of $99 million, $0.02 per common share on a diluted basis
- Q3 cash balance of $2.60 billion
- Nortel announces a share consolidation on a 1 for 10 basis
Revenues were $2.96 billion for the third quarter of 2006 compared to $2.52 billion for the third quarter of 2005 and $2.74 billion for the second quarter of 2006. The Company reported a net loss in the third quarter of 2006 of $99 million, or $0.02 per common share on a diluted basis, compared to a net loss of $136 million, or $0.03 per common share on a diluted basis, in the third quarter of 2005 and net earnings of $366 million, or $0.08 per common share on a diluted basis, in the second quarter of 2006.
"I am pleased with our overall revenue growth and, in particular, in our focus areas of next generation mobility, enterprise and related services, and metro optical. I am also pleased with the 270 basis points operating margin improvement versus the third quarter of 2005. However, we should and will be moving faster. Pricing pressures and the speed at which our revenues are shifting to next generation, early cycle products is increasing our challenge to drive profitability improvements," said Mike Zafirovski, president and chief executive officer, Nortel.
"The management team and I are resolute in achieving a globally competitive cost structure and we are accelerating and enhancing our Business Transformation and Lean Six Sigma programs to close this gap and achieving double digit operating margins in 2008. I believe recent steps of establishing the Microsoft alliance, divesting our UMTS access business, and increasingly shifting resources to lower cost centers are indicative of our resolve."