NT – Peers Suffering, But Not As Badly
Google tells a story about the end of the carrier equipment companies over the last few days. As Nortel reports a $3.41 billion loss for 3Q, (WSJ subscription required) 1,300 job cuts and the departure of several corporate-level executives: CMO, CTO, President of Global Services, Nortel peers are also cutting jobs. Nokia-Siemens reported 1,200 jobs to be cut from Finland and Germany.
The whole telecom equipment sector has been dragged down the past few days as shown on this chart. Of course, none have been dragged down so lowly as Nortel. BTW, that $0.86/share in the upper left. Yikes. It may be too bad that Nortel is not running out of cash. Longtime Nortel analyst, Nikos Theodosopoulos of UBS claims that the company is worth $3.25/share in parts.
From my vantage point, the company's leadership needs to do more than flatten its organizational chart. Given that Nortel, Alcatel and Motorola are the only three of its carrier-peer companies (Ericsson, Siemens, Lucent ditched enterprise divisions earlier this year) that still retain a substantial enterprise business.
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