All About Nortel

Baird & Co. analyst Kenneth Muth has downgraded Nortel to a “neutral” from “under-outperform” due to concerns about spending trends by wireless and wireline carriers during the second quarter. Muth said he doesn’t expect Nortel to execute a turnaround as quickly as it anticipates despite efforts by CEO Mike Zafirovski to restore the company’s financial [...]

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The Wall St. Journal has a story in today’s paper (registration required) looking at whether Nortel will get to keep $3.9-billion of deferred tax credits on its balance sheet. The WSJ cites an analyst - Glass Lewis’ Jason Williams - who believes Nortel may have to write down the value of the credits, which could [...]

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Nortel is expected to post its second-quarter results next week (perhaps Wednesday). It will be interesting to see how much of an impact CEO Mike Zafirovski’s cost-cutting program will have on the bottle line. Any sign that profits are on the rise could easily give Nortel watchers another excuse to jump on the bandwagon and [...]

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According to Infonetics, capital expenditures by telecom service providers climbed to $202-billion last year, and it is expected to hit $236-billion by 2009. In total, this will mean capex of $1.1-trillion over the next four years. "Collectively spending over a trillion dollars in five years sounds like a lot of money, but it’s actually significantly [...]

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According to Red Herring, Verizon Wireless’ aggressive plans to provide multi-media services such as voice, video and data over an IP-based network will involve five of its largest equipment suppliers - Nortel, Cisco, Lucent, Motorola and Qualcomm. The project involves an industry standard called IP Multimedia Subsystem (IM).

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Nortel could be edging closer to selling or spinning off its UMTS access business in light of some recent organizational changes. In a mini-report, UBS Securities said the company’s GSM and UMTS access businesses have been separated. As well, the vice-president and general managers for Nortel’s WiMax and converged core networks units have “moved on” [...]

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According to Forbes.com, RBC Capital Markets analyst Mark Sue has dropped his 12-month stock price target on Nortel to $3 from $3.50 due to concerns the growth of the company’s CDMA business, which accounts for 50% of its wireless sales, has already peaked. Among Sue’s concerns is the migration from CDMA to GSM by carriers [...]

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Gee, you figure amid all the excitement earlier this week about Nortel’s unified communications deal with Microsoft, Nortel shares would have performed well. Instead, they touched a 52-week low of $1.94 today. Go figure.

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There’s always a new drama at Nortel. Amnesty International launched a global campaign yesterday against Internet repression, which it claims involves companies that aid in censorship and repression of freedom of speech. Amnesty’s hit list also includes Sun, Cisco, Yahoo! and Google. “From Iran to the Maldives and Cuba to Vietnam, governments are both cracking [...]

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Local Techwire has a round up on the reaction to Nortel’s four-year deal with Microsoft involving unified communications. Among the most critical people is tech curmudgeon John Dvorak, who goes after Nortel CEO Mike Zafirovski’s strategy to focus on software and services. “I knew there was a serious problem with marijuana in Canada,” Dvorak wrote. [...]

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