Nortel's acquisition of Bay Networks more than a year ago continued to hit the telecom equipment giant's bottom line, although it managed to turn last year's losses into a profit for its 1999 fiscal third quarter.
Revenues for the quarter, which ended 30 September, increased to USD5.39 billion from USD4.14 billion last year. Net profits were USD8 million, with break-even earnings per share, compared with last year's loss of USD181 million or a loss per share of USD0.17.
Analysts polled by First Call had expected earnings per share of USD0.26, however.
But this year's profits were hit by a USD384 million charge related to the acquisition of Bay Networks in June 1998 and a further USD103 million charge from Nortel's reorganisation of its enterprise unit.
The firm also received a USD110 million gain from the divestiture and outsourcing of certain operations as part of a companywide overhaul, which was announced in January 1999.
John Roth, Nortel's president and chief executive, said: "We are extremely pleased with our strong growth in the quarter, which reflected continued momentum with our carrier and service provider customers."
He added that the company had experienced "strong demand" for its new IP offerings, but its optical, wireless and hig-peed access tools enjoyed the highest growth rates at 32 per cent. Sales of its enterprise products, which include Bay Networks' tools, also grew 27 per cent.
Overall sales outside the US and Canada grew by 24 per cent.
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