Nortel Q1 earnings reach $US222 million

Northern Telecom (Nortel)'s first-quarter earnings hit $US222 million, or 33 cents per share, excluding costs related to acquisitions, compared to $140 million a year ago, the company announced on Tuesday, attributing its growth to substantial new contracts with telecommunications carriers.

Including acquisition costs of $692 million, mostly related to the purchase of Bay Networks, Nortel recorded a net loss of $470 million or 71 cents per share for the quarter, compared to a loss of $32 million or 6 cents a share a year ago.

Revenue increased 26 per cent from a year ago to $4.4 billion for the quarter that ended March 31, officials from the Mississauga, Ontario-based company said.

In the carrier segment of its business, Nortel said revenue increased 15 per cent for the quarter compared to a year ago, pushed by increases in optical network systems sales in the US, Europe and Asia-Pacific. The company's corporate segment saw a revenue gain of 83 per cent, largely because of the merger with Bay and growth in local area network switching, company officials said.

US revenue jumped 37 per cent and revenue related to operations in Canada rose 3 per cent. Outside of North America, Nortel revenue rose 15 per cent, largely from Asia-Pacific and Europe, which helped offset a decrease in Latin America because of economic turmoil in Brazil, officials said.

At a shareholder's meeting today, Nortel is expected to officially change its name to Nortel Networks, a moniker the company already has been using.

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