For those of you looking for more information about the profitable Metro Ethernet Network business, here are some facts from Nortel’s Q2 results
Optical networking Sales
Q2: $300M vs. $285M in Q2 2007
Six-months: $547M vs. $548M
Data networking and Security
Q2: $78M vs. $78M
Six-months: $158M vs. $188M
MEN revenues decreased to $705M in the first half of 2008 from $736M in the first half of 2007, a decrease of $31M or 4%. The decrease was primarily due to a decrease in the data networking and security solutions business of $30, while the optical network solutions business remained essentially flat.
MEN gross profit increased to $252M in the first half of 2008 from $242M in the first half of 2007, while gross margin increased to 35.8% from 32.9%.
The increase in gross profit was primarily due to higher volume, the favorable impact of foreign exchange fluctuations and lower costs due to our cost reduction program initiative.
This increase was partially offset by unfavorable product mix, royalty costs, charges related to certain inventory revaluation and the completion of two significant customer contract obligations resulting in the recognition of previously deferred revenues in the first half of 2007 that was not repeated in the first half of 2008 and increased costs due to a settlement with one of our vendors.
MEN: Some Numbers
For those of you looking for more information about the profitable Metro Ethernet Network business, here are some facts from Nortel’s Q2 results
Optical networking Sales
Q2: $300M vs. $285M in Q2 2007
Six-months: $547M vs. $548M
Data networking and Security
Q2: $78M vs. $78M
Six-months: $158M vs. $188M
MEN revenues decreased to $705M in the first half of 2008 from $736M in the first half of 2007, a decrease of $31M or 4%. The decrease was primarily due to a decrease in the data networking and security solutions business of $30, while the optical network solutions business remained essentially flat.
MEN gross profit increased to $252M in the first half of 2008 from $242M in the first half of 2007, while gross margin increased to 35.8% from 32.9%.
The increase in gross profit was primarily due to higher volume, the favorable impact of foreign exchange fluctuations and lower costs due to our cost reduction program initiative.
This increase was partially offset by unfavorable product mix, royalty costs, charges related to certain inventory revaluation and the completion of two significant customer contract obligations resulting in the recognition of previously deferred revenues in the first half of 2007 that was not repeated in the first half of 2008 and increased costs due to a settlement with one of our vendors.