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!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?