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| (NT) |  | | Company Name: | | | Ticker Symbol: | NT | | Industry: | | | Summary: Nortel Networks Corporation (NT) designs and manufactures a broad range of networking gear, including traditional voice switching equipment, next g...more | |
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Reasons to Buy
Investors Give Reasons to Buy
| If You Think Is a Buy, Post Your Reasons Below | |
Analysts Recommending Buy
Reasons to Sell
Investors Give Reasons to Sell
| If You Think Is a Sell, Post Your Reasons Below | | Bears (Negative or equivalent ratings) – 10 firms or 52.6% – Target prices range from $0.00 to $1.47. These firms are negative on the stock based on the challenges related to North American CDMA spending. The firms believe NT is in a weak relative position considering its market share and weak balance sheet. No near-term relief in the form of substantial revenue growth from new fourth-generation wireless technologies is expected. In the absence of new revenue growth, the firms believe Nortel will face the dilemma of either cutting research and development or delivering lower earnings, causing investors to doubt the Company’s strategy. Further, the firm thinks that low growth, high competitive pressure, and an absence of new technology drivers will be the norm for much of the telecom industry for the next two to three years with the exception of the rebounding optical segment.
| | Last edited Tue Jan 06, 2009 07:25 AM
by SSen (Zacks Investment Research) |  |
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Analysts Recommending Sell
Reasons to Hold
Investors Give Reasons to Hold
| If You Think Is a Hold, Post Your Reasons Below | |
Analysts Recommending Hold
How Can I Decide if Is a Buy or a Sell?
| | How Can I Decide if Is a Buy or a Sell? | Follow the Experts...
| | There are 0 individual(s) in the US who know more about and its stock price than almost anyone else These 0 individual(s) are the 0 brokerage analysts who follow and whose research is discussed above by Wiki posters who receive the research from these brokerage firms To decide if you want to buy , you could read the discussions above and see if you find a bull or bear argument for that you think is compelling – or you might toss a coin. To help you evaluate the credibility of the arguments made by an analyst, we have displayed the Zacks All Star Rating of the analyst after his/her name. Zacks rates analysts as 1, 2, 3, 4, or 5 STAR analysts based on the performance of their stock recommendations. The analysts with 5 STAR ratings have had the best performance. For more information on these Zacks Analyst ratings, go to http://www.zacks.com | |
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...or Make Your Own Non-Consensus Decision
| | However, we believe that there is a better way to make stock selection decisions, and this Wiki is dedicated to this technique. The better way – which is taught to all MBA students, and used by professional investors – is not easy. But it is one of the few investment techniques that actually does work. The better way requires you to find errors in the consensus forecasts of revenue and EPS. Until the creation of this Wiki, it has been virtually impossible for an individual investor to develop accurate non consensus revenue and earnings forecasts because no one individual has had enough information to accurately out-forecast the Wall Street analysts.
However, by using the Wiki to pool together the collaborative intelligence of large numbers of individuals who are familiar with the Industry, with , and with its suppliers and customers, we as a group do have a realistic chance of finding that nugget of accurate non-consensus information.
Warren Buffett finds these nuggets. This Wiki can help you find your own nuggets.
But this process can only work for those companies and industries with which you are very familiar. To apply this process to , you need to focus on 2 questions:- Do I agree with the consensus estimate of the future revenue of ?
- Do I agree with the consensus estimates of the EPS of ?
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How Can I Find Errors in the Consensus Forecasts for ?
| How Can I Find Errors in the Consensus Forecasts for ? | The following sections are designed to help Wiki users identify errors in the consensus revenue forecasts for the major products. Below each consensus revenue forecast is a Wiki section reserved for users to discuss why these consensus forecasts may be high or low.
All consensus forecasts are provided by Zacks Investment Research. |
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Carrier Networks – Consensus Forecasts of Carrier Networks Revenue in Millions
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| $4,915.00 |
$5,142.60 |
$4,493.00 |
$4,164.00 |
$3,493.70 |
$3,246.40 |
$3,533.40 |
-5.4% |
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Metro Ethernet Networks – Consensus Forecasts of Metro Ethernet Networks Revenue in Millions
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| $1,347.00 |
$1,588.00 |
$1,525.00 |
$1,394.70 |
$1,379.20 |
$1,497.80 |
$1,337.60 |
-0.1% |
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Enterprise Solutions – Consensus Forecasts of Enterprise Solutions Revenue in Millions
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| $2,061.00 |
$2,292.70 |
$2,620.00 |
$2,531.40 |
$2,368.20 |
$2,407.10 |
$2,433.40 |
2.8% |
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Global Services – Consensus Forecasts of Global Services Revenue in Millions
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| $2,040.00 |
$2,142.50 |
$2,087.00 |
$2,117.20 |
$2,034.60 |
$2,115.60 |
$2,069.90 |
0.2% |
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Other Sources – Consensus Forecasts of Other Sources Revenue in Millions
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| $146.00 |
$247.30 |
$223.00 |
$230.70 |
$223.40 |
$220.00 |
$219.00 |
7.0% |
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EPS FORECASTS
This section is designed to find errors as the consensus forecast of EPS. The consensus forecasts for the lines in the Income Statement are shown and below each consensus forecast is a wiki section to discuss why the consensus forecast of that item may be high or low
Consensus Forecasts of Total Revenue
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
11/05 |
| 1. Total Revenue |
$10,509.00 |
$11,418.10 |
$10,948.00 |
$10,433.80 |
$9,509.40 |
$9,365.80 |
$9,593.20 |
-1.5% |
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| Discussion by Wiki Users |
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Consensus Forecasts of Pre - Tax Income
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
| 7. Pre - Tax Income |
$51.00 |
($146.90) |
$390.80 |
$288.70 |
$211.10 |
$194.90 |
$690.00 |
| Net Income |
$80.00 |
($269.70) |
$171.00 |
($135.50) |
($102.50) |
$22.70 |
$405.00 |
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Consensus Forecasts of GAAP EPS
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Dec-05 |
Dec-06 |
Dec-07 |
Dec-08 |
Dec-09 |
Dec-10 |
Dec-11 |
| GAAP EPS |
($6.02) |
$0.06 |
($1.78) |
($5.92) |
($0.40) |
$0.06 |
$0.73 |
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| Discussion by Wiki Users |
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What if I Agree with Consensus Forecasts?
| What if I Agree with Consensus Forecasts? | You Can Still Make an Effective Investment Decision
| | If you agree with the above consensus forecasts of revenue and of EPS, you can still make an effective investment decision by determining that a relative valuation metric is out of line. Perhaps because of events taking place in the industry, or with other companies, you may feel that is either undervalued or overvalued, should the consensus estimates of revenue and EPS be realized. This section of the Wiki helps you think about valuation by comparing to some of its peers using a number of standard relative valuation metrics. This section also includes a simple discounted cash flow model for based on the consensus forecasts. The following table should be your starting point. This shows P/E, P/Sales, and P/Cash Flow for and for comparable companies. |
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CF is operating cash flow plus after-tax interest expense. |
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| Discussion by Wiki Users of Relative Valuation | | No comments yet. Be the first | | |
Dividend Discount Model for
| | The two major techniques used by fundamental analysts to evaluate the value of a stock are the relative valuation metrics such as PE discussed above and the dividend discount model (DDM) or discounted cash flow model (DCF). More information about these valuation-related topics is available here. This reference answers most of the questions investors have when they first encounter these discount approaches to determining value, such as: - What is the discount rate?
- Why does the DDM discount earnings and not dividends?
- How can I use a DDM if the company does not pay dividends?
- How do I set the terminal value? (applies only to DCF)
- How do I calculate cash flow to use the DCF model?
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What Do Insiders and Institutional Owners Say about ?
| Insiders and Institutional Owners Discuss Issues Here | | No comments yet. Be the first | | |
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Industry Analysis
Industry Outlook for Major Companies
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Role in the Industry
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Company Specific Investment Issues
The issues discussed in the sections below generally comprise the bulk of the content in a typical research report. Understanding these subjects is certainly important when making an investment decision for . However, to provide the most value to Wiki users as you read and contribute to these discussions, please try and tie your comments back to their specific impact on forecasts of future Revenue, Net Income, EPS, or Cash Flow. | Discussion about Capital Structure / Solvency / Cash Flows Issues |
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| Discussion about Governance / Social Responsibility / Treatment of Employees | | No comments yet. Be the first | | |
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| Acquisitions/Divestures/Joint Ventures/Hot New Products/Exciting Opportunities |
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| Discussion about Upcoming Events to Watch for That Will Impact Stock Price | | On February 25, 2009, NT is expected to release its 4Q08 and FY08 earnings results.
| Last edited Tue Jan 06, 2009 07:30 AM
by SSen (Zacks Investment Research) | |
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| Discussion about Major Risks |
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Company Overview and History
| Company Overview | |
Nortel Networks Corporation (NT) designs and manufactures a broad range of networking gear, including traditional voice switching equipment, next generation IP packet-based switches, advanced optical switching & transport products, data networking equipment, and wireless infrastructure platforms based on both the CDMA and GSM technology standards. Nortel is one of the few diversified equipment companies (along with Cisco, Ericsson, and Alcatel-Lucent) that are able to provide fully integrated, end-to-end networking solutions. Nortel reports its revenues in five different areas as follows: Carrier Networks (accounted for 41% of fiscal 2007 revenue), Enterprise Solutions (24%), Global Services (19.1%), Metro Ethernet Networks (13.9%), and Other (2%). During fiscal 2007, geographically, the U.S. accounted for 45.4% of total revenue Europe, Middle East & Africa accounted for 25% Asia represented 16.2% Canada 7.5% and Caribbean & Latin America accounted for 5.9% of total revenue.
| | Source: Zacks Investment Research | |
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Recent Events
| Recent Events | | On December 11, 2008, Nortel Networks Corporation received a notice from the New York Stock Exchange (NYSE) that it will face delisting if it cannot bring the share price above the $1.00 minimum in the next six months. Under NYSE's rules, the Company has six months from the date of the notice to bring its average common share price back above $1.00.
On December 4, 2008, NT was selected by Spain's national railway infrastructure company, ADIF, to implement, operate, and maintain a complete GSM-R radio communication solution on the new Barcelona-Figueres high-speed line. The contract value is estimated at over EUR 21 million (US$ 27 million).
On November 13, 2008, NT was selected by Verizon to help deliver a new managed telepresence offering that allows organizations to collaborate over IP networks.
On November 12, 2008, NT announced an enhanced managed services agreement with Bharti Airtel, India’s leading integrated telecom service provider. Under the agreement Nortel will continue to provide its contact centre technology (CCT) solution. This is a two-year extension to the initial contract announced in March 2006. Bharti Airtel plans to extend the efficiencies achieved through this enhanced agreement to its customers, who will benefit from this service option by getting more power in their hands.
On November 10, 2008, NT announced its 3Q08 financial results. Revenue in 3Q08 was down 14.0% y/y to $2.32 billion. NT reported a net loss of $3.41 billion or ($6.85) per share on a GAAP basis; on a non-GAAP basis, the Company reported a net loss of $150.0 million or ($0.30) per share.
| Last edited Tue Jan 06, 2009 07:33 AM
by SSen (Zacks Investment Research) | |
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Created by: WikiMigrationBot.
Last Modification: Tuesday 17 of March, 2009 19:01:42 CDT by WikiMigrationBot.
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