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NORTHERN TELECOM REPORTS FIRST QUARTER RESULTS

 TORONTO, April 27 /PRNewswire/ -- Northern Telecom (NYSE: NT) today reported orders, revenues, and earnings for the first quarter of 1993.
 First quarter revenues of $US 1.94 billion increased two percent over the $US 1.90 billion reported for the first quarter 1992. Net earnings applicable to common shares were $US 74 million as compared with $US 101 million for the prior year. Earnings per common share were $US .30 as compared with the record $US .41 for the prior year. Order input during the quarter was $US 1.84 billion, a decrease of four percent from $US 1.92 billion a year earlier. Orders on hand at March 31, 1993 were $US 3.53 billion, up 18 percent over the prior year.
 Jean C. Monty, president and chief executive officer, said: "As we indicated in our March 25, 1993 announcement, earnings performance did not meet our expectations due principally to lower margins and an accelerated rate of investment in R&D and planned international market development expenditures which were not offset by anticipated revenue growth. Although we are not satisfied with first quarter performance, we continue to take steps to build our business in non-North American markets - business that now accounts for some 25 percent of our revenues. We have invested heavily in research and development, and will continue to do so."
 International revenues recorded a strong year over year gain led by the Asia Pacific and Caribbean and Latin America markets. Revenues in Canada were up slightly. These gains were partially offset by lower revenues in Europe and the United States.
 Product line revenue performance was led by strong gains in Transmission and good growth in Multimedia Communication Systems. Central office switching revenue was essentially flat. Cable and Outside Plant and Other Revenue declined.
 For the first quarter of 1993, selling, general and administrative expenses were $US 369 million, up five percent compared with $US 353 million for the comparable period in 1992. As a percentage of revenue, selling, general and administrative expense increased to 19.0 percent as compared with 18.6 percent for the first quarter of 1992.
 Research and development expenses totaled $US 227 million in the first quarter, compared with $US 203 million in 1992. This represents 11.7 percent of revenues, compared with 10.7 percent in the first quarter of 1992.
 Commenting on the outlook , Mr. Monty said: "All of our efforts are focused on delivering a good year to our shareholders, including the acceleration of cost improvement programs to better absorb price reductions, while continuing to build strong foundations for the future.
 "Although the economic environment in Europe has not yet improved, the prospect for high growth in the Latin America and Asia Pacific markets remains strong. In North America, expected good access line growth combined with the improving economy and a strong order backlog suggest a quarterly financial profile similar to 1992. Looking beyond, technology and competition will continue to drive the transformation of the global communications industry and Northern Telecom is well positioned to capitalize on that change."
 Northern Telecom's common shares are listed on the New York, Toronto, Montreal, Vancouver, London, and Tokyo stock exchanges.
 NORTHERN TELECOM LIMITED
 FIRST QUARTER CONSOLIDATED RESULTS
 (U.S. dollars, millions except per share figures -- unaudited)
 Three months ended
 March 31,
 1993 1992 (B)
 Revenues $ 1,942.1 $ 1,898.6
 Cost of revenues 1,168.9 1,120.2
 Gross profit 773.2 778.4
 Selling, general and administrative
 expense 368.8 352.8
 Research and development expense 227.0 203.1
 Goodwill amortization 11.8 14.3
 Operating earnings 165.6 208.2
 Investment and other income - net (.4) 4.8
 Interest expense
 Long-term debt (34.0) (27.2)
 Other (16.2) (21.9)
 Earnings before income taxes 115.0 163.9
 Provision for income taxes 39.1 59.7
 Net earnings 75.9 104.2
 Dividends on preferred shares 1.8 3.3
 Net earnings applicable to common shares $ 74.1 $ 100.9
 Earnings per common share (A) $ .30 $ .41
 Dividends per common share $ .09 $ .08
 Effective tax rate 34.0 pct 36.4 pct
 (A) Based on weighted average number of
 common shares outstanding (millions) 249.0 246.2
 (B) Restated to conform with current year's presentation including reclassification of investment tax credits from provision for income taxes to research and development expense.
 -0- 4/27/93
 /CONTACT: Tom Tropea or Gary Brandt both for Northern Telecom Limited, 416-566-3178 or 416-566-3098/
 (NT)


CO: Northern Telecom ST: Ontario IN: TLS SU: ERN

LR -- NY026 -- 1172 04/27/93 09:06 EDT
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Date:Apr 27, 1993
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