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Nortel Networks to Continue Transforming via Acquisitions

7:10 am on August 4, 2007 | Category: Business, Corporate, Wireless Technology

Canadian telecom equipment giant, Nortel Networks, says that it is “open” to making new acquisitions in the near future, as it seeks to expand its technology portfolio and boost revenue growth.

“We are doing lots of analysis internally on how to grow the company organically and we started discussions recently with companies that we believe can be adding to our growth trajectory,” explained Nortel CEO, Mike Zafirovski, after announcing the company’s second-quarter financial results.

Nortel posted a net loss of $37 million, or $0.07/share, for the quarter ending on June 30, from a net profit of $342 million, or $0.79/share in the same period a year earlier. This reversal is due to a combination of one-time charges and lower-than-expected quarterly sales.

Revenue was down 8% to $2.56 billion, from $2.78 billion in Q2/2006, mostly due to the sale of Nortel’s 3G UMTS equipment business. Analysts had been expecting sales of around $2.75 billion.

Despite this shortfall, however, Mr. Zafirovski asserted that the company’s ongoing business transformation was still “on track.”

“We think the foundation [of Nortel] is much firmer now,” Zafirovski was quoted as saying.

In recent quarters, Nortel has sought to sell off many its older, more mature businesses, so as to refocus on higher-margin emerging technologies like wireless VoIP and WiMAX.

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