Comments on: Guest Post: Peeling Back the Q1 Onion

By: Observer

Observer — Sun, 11 May 2008 22:24:02 +0000

UMTS is no longer a part of Nortel. The division was burning thru more cash than they were pulling in. It was a smart move to get rid of those employees and the software bloat of that business. The EU will try to keep UMTS afloat thru Nokia, ERICY and Alcatel but they will be falling behind the world. WiMax and LTE are where the rest of the world is going.

Bottom line: You cannot discount the fact that Nortel outperformed the forecasts. They also gave better forecasts than most of their carrier competitors for the rest of 2008.

Disclosure: I've been as negative as anyone on Nortel since this blog started. I'm finally a buyer of this stock at these levels keeping in mind that averaging is the best way to buy any stock.

By: Observer

Observer — Sun, 11 May 2008 18:24:02 +0000

By: ex-nt2

ex-nt2 — Thu, 08 May 2008 15:42:35 +0000

Tongue.In-Cheek aka TIC(K) is probably one of those decadent ivory tower managers who have no clue on the business.

By: ex-nt

ex-nt — Thu, 08 May 2008 14:02:11 +0000

How can Nortel recognize revenue that occurred 5 quaters ago? Simple answer: Sarbanes Oxley. With Sarbox, you cannot recognize revenue until it is clear that the customer has no recourse for return, you have delivered all contractually committed capabilities, etc. It does not matter if they already paid you, revenue ONLY can be recognized when you have met the stringent tests of Sarbox. That is why revenue today is more misleading than it was pre-Sarbox. So, Tongue.In.Cheek, my question about where the LG came from was entirely valid, and your point about misleading information is completely wrong.

By: no there any more

no there any more — Thu, 08 May 2008 12:37:22 +0000

I had commented a week ago or so – what was the LG revenue about? Considering that even a $2M deal makes financial headlines now, and there are no headlines or press releases that pay homage to the revenue that has appeared from the JV….it must be UMTS revenue that is either being recognised late (SOX) (per a more recent comment from someone else and a subject of this item), or revenue flowing through NT to ALU, or a lot – and it must be a lot – of Enterprise micro-deals.

By: Rust

Rust — Thu, 08 May 2008 09:23:57 +0000

ex-nt probably right. If we look into segmented revnuews we see unexpected peak for GSM/UMTS products as well as peak in Asia sales. Most likely is completion of some LG-Nortel 3G project started in 2006/2007.

By: Tongue.In.Cheek

Tongue.In.Cheek — Thu, 08 May 2008 02:41:01 +0000

ex-nt – perhaps you can explain to us how Nortel could recognize revenue from a business unit sold 5 quarters ago? Wouldn't that be like Home Depot recognizing revenue actually earned by Lowes?

Then again, this blog is the unofficial home of misleading information for the intent of discrediting Nortel. Facts aren't relevant, when a fictional story can be created.

Your suggestion is totally ridiculous.

By: ex-nt

ex-nt — Wed, 07 May 2008 17:39:40 +0000

The question is: did the JV revenue come from continuing businesses like set-top boxes or from the UMTS business that was sold to Alcatel? If the revenue came from continuing businesses, you are right to say that Nortel is being bullied in the press. If the revenue was deferred revenue from UMTS sales in Korea, then the press are being overly generous to Nortel. So what is the answer?