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Nortel Financials Tell the Tale
The Mike Z departure will probably be the big Nortel news today, but Nortel also released its 2Q09 financials this morning, and the numbers actually do show the bounce-back from the first quarter that Nortel execs have been touting, though overall revenues were down 25% year-over-year.Enterprise Solutions revenues were up 17.7% over 1Q09, which was better than the overall Nortel increase of 13.8% Q/Q. Still, Enterprise Solutions was down 28.3% from the year-ago quarter, which was larger than the 24.8% drop experienced by the company as a whole.
Maybe the oddest result of all came in the Nortel carrier division, where the CDMA business unit actually beat its year-ago quarter, scoring $555 million revenue versus $542 million in 2Q08. Revenues for this unit were up 42% from 1Q09. The company's release indicates that, "The wireless segment benefited in the second quarter from the network expansion of a certain customer," though you'd have to figure that this segment will also be the first to benefit from having its future course more or less resolved, thanks to Ericsson's successful bid to acquire the Nortel CDMA and GSM/UMTS business units.
The quarter-over-quarter improvements suggest that there's still life left in Nortel, and they set the stage for what should be a very interesting auction of the Enterprise Solutions business on September 11. "Stalking horse" buyer Avaya may find itself having to up its bid if it wants to hang onto Enterprise Solutions.