Nortel Reports Revenue of US$2.96 Million

Nortel reported revenues of US$2.96 billion for the third quarter of 2006 compared to US$2.52 billion for the third quarter of 2005 and US$2.74 billion for the second quarter of 2006. The company reported a net loss in the third quarter of 2006 of US$99 million, or US$0.02 per common share on a diluted basis, compared to a net loss of US$136 million, or US$0.03 per common share on a diluted basis, in the third quarter of 2005 and net earnings of US$366 million, or US$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.



For Mobility and Converged Core Networks (MCCN), revenues were US$1,540 million, an increase of 23 percent compared with the year-ago quarter and an increase of 7 percent sequentially.



Fort Enterprise Solutions, revenues were US$609 million, an increase of 14 percent compared with the year-ago quarter and an increase of 28 percent sequentially.



For Metro Ethernet Networks, revenues were US$430 million, an increase of 18 percent compared with the year-ago quarter and a decrease of 8 percent sequentially.



Global Service revenues were US$316 million, an increase of 4 percent compared with the year-ago quarter and an increase of 2 percent sequentially.



Gross margin was 38 percent of revenue in the third quarter of 2006.

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