Nortel wins Olympic gold, but reports Q2 loss

Company will build network for 2012 London Summer Games

It was a good news/bad news week for Nortel.

First the good news: the company was selected to supply the network infrastructure for the 2012 London Summer Olympic Games. Nortel will provide LAN, WAN, voice, data and security gear -- everything from the phone handset to the network transport -- and application software to connect 15,000 athletes from 205 international sporting organizations, 20,000 members of the media, 7,000 volunteers and over 9 million spectators over the two-week event.

"It's like building a network for a Fortune 100 company," says Nortel's Enterprise Solutions President Joel Hackney.

BT is the service provider for the games.

Hackney would not disclose financial details of the award but said they would "not have a material impact" on Nortel's enterprise business.

"It's more perception strengthening," he said.

Nortel is also a supplier and sponsor of the 2010 Winter Olympic Games in Vancouver, Canada.

Now the bad news: Nortel's enterprise business fell 5 per cent sequentially in the second quarter though was up 3 per cent year-over-year. Revenue, totaling US$610 million in the quarter, was positively impacted by higher sales of voice gear and applications, while data networking sales were flat overall, with sales lower in North America than in last year's second quarter.

Overall, Nortel's second-quarter revenue rose 2 per cent over last year's second quarter but the company's losses more than tripled. Nortel is nonetheless sticking to its full year guidance of low single digit revenue growth and a 43 per cent gross margin in what it says is a "challenging" business environment facing "increasing risk due to general macro-economic weakness, continuing competitive pressures and potential of further reduced spending by key North American [wireless] customers."

Nortel says accelerated growth in its enterprise and Metro Ethernet businesses in the second half, along with US$350 million of deferred wireless revenue, are key to the company achieving its financial objectives for this year.

Hackney says he doesn't see enterprise spending improving this year.

"It will be constrained through the rest of the year," he says, echoing similar assessments from John Chambers, CEO of Nortel rival Cisco.

Let the games begin.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Bitdefender 2019

This Holiday Season, protect yourself and your loved ones with the best. Buy now for Holiday Savings!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?