Printer Friendly


 TORONTO, Oct. 26 /PRNewswire/ -- Northern Telecom Limited (NYSE: NT) today reported results for the third quarter and first nine months of 1993.
 For the third quarter, revenues were US$1.88 billion, down seven percent compared with US$2.02 billion for the prior year. The net loss applicable to common shares was US$35 million, or loss per common share of US$.13, compared with net earnings applicable to common shares of US$113 million, or earnings per common share of US$.46 last year. Order input for the quarter increased three percent to US$ 2.34 billion compared with US$2.26 billion for the prior year. Orders on hand at Sept. 30, 1993 were US$4.41 billion, an increase of 30 percent year- over-year.
 For the first nine months of 1993, revenues were US$5.69 billion, down three percent compared with US$5.87 billion for the same period in 1992. The net loss applicable to common shares for the first nine months was US$989 million, or a loss per share of US$3.96. This compares with net earnings applicable to common shares of US$283 million, or earnings per share of US$1.15 for the first nine months of 1992. Special charges from the second quarter 1993, totaling US$940 million after tax, or US$3.77 per share, are included in the year-to-date results. Order input for the first nine months of 1993 was US$6.35 billion, compared with US$6.32 billion for the same period in 1992.
 Geographic revenues in the third quarter continued to show strong year-over-year gains in the Asia Pacific market led by revenue growth in China. European revenues also increased due to the 1993 consolidation of joint ventures in Turkey and France. These gains were more than offset by a significant decline in Canada due primarily to the capital spending cuts by Bell Canada. Third quarter revenues were also down in the United States and the Caribbean and Latin America compared with the third quarter 1992. For the first nine months, the gains in Asia Pacific and the Caribbean and Latin America have been more than offset by declines in Canada and the United States.
 Product Line revenues in the quarter showed good growth in Multimedia Communication Systems, but were more than offset by year- over-year declines in Central Office Switching, Cable and Outside Plant, Transmission and Other. For the first nine months, solid gains in Transmission and Multimedia Communication Systems have been more than offset by declines in Central Office Switching, Cable and Outside Plant and Other revenues.
 Commenting on revenues, Jean C. Monty, president and chief executive officer of Northern Telecom, said: "We continue to be encouraged by the current growth and potential for further expansion in international markets. We are also pleased with the very strong revenue gains from our wireless systems product line and customer acceptance of the S/DMS TransportNode(TM), a key element of our FiberWorld(TM) portfolio."
 Selling, general and administrative expenses for the third quarter were US$391 million, or 20.8 percent of revenue, compared with US$382 million or 18.9 percent of revenue for the same period in 1992. For the first nine months selling, general and administrative expenses were US$1.14 billion or 20.0 percent of revenue, compared with US$1.11 billion, or 19.0 percent of revenue in the prior year.
 Research and development expenses totaled US$218 million, or 11.6 percent of revenues in the third quarter, compared with US$213 million, or 10.5 percent in the third quarter of 1992. For the first nine months, research and development expenses increased to US$700 million compared with US$660 million for 1992, or 12.3 percent of revenues compared with 11.2 percent last year.
 Addressing performance for the quarter, Mr. Monty, said: "Third quarter results, although still unacceptable, showed some improvement over the second quarter operating results. The new initiatives and corrective actions we announced in July to improve competitiveness and profitability are being implemented and we continue to anticipate a return to profitability in the fourth quarter of this year.
 "The third quarter was highlighted by the launch of several new products targeted at future growth opportunities. To address the emerging video services market, a new ATM switch, the Magellan Gateway(TM), was introduced to our portfolio of broadband multimedia offerings. In the wireless product line, we unveiled a complete PCS 1900/DCS 1800 wireless network portfolio, available today, to address the global personal communications services (PCS) market. And, we began commercial shipments of S/DMS AccessNode(TM), a next generation digital loop carrier product.
 "In the quarter, we also announced several important orders including a major contract for central office switching with NYNEX, a fiber in the loop contract with British Telecom, and additional awards for switching equipment in China. We continue to invest in the strategic product and market areas of our business and in strengthening customer service."
 Northern Telecom's common shares are listed on the New York, Toronto, Montreal, Vancouver, London, and Tokyo stock exchanges.
 Third Quarter Consolidated Results
 (Unaudited, In Millions Of U.S. Dollars
 Except Per Share Figures)
 Period ended Three Months Nine Months
 Sept. 30, 1993 1992(B) 1993 1992(B)
 Revenues $1,880.0 $2,021.4 $5,690.2 $5,868.4
 Cost of revenues 1,268.7 1,195.4 3,729.6 3,503.7
 Gross profit 611.3 826.0 1,960.6 2,364.7
 SG&A 390.6 382.0 1,135.9 1,114.5
 Research and
 development expense 217.5 213.0 700.3 659.8
 Goodwill amortization 9.5 14.8 33.7 43.1
 Restructuring costs
 and other charges --- --- 1,161.0 ---
 Operating earnings (loss) (6.3) 216.2 (1,070.3) 547.3
 Investment and other
 income -- net 28.0 17.5 24.0 60.5
 Interest expense(C)
 Long-term debt (32.8) (28.7) (91.1) (83.3)
 Other (37.9) (30.7) (89.6) (77.0)
 Earnings (loss)
 before income taxes (49.0) 174.3 (1,227.0) 447.5
 Income tax provision
 (recovery) (15.3) 58.1 (242.5) 154.8
 Net earnings (loss) (33.7) 116.2 (984.5) 292.7
 Dividends on preferred
 shares 1.5 2.9 4.9 9.4
 Net earnings (loss)
 applicable to
 common shares $ (35.2) $ 113.3 $ (989.4) $ 283.3
 Earnings (loss) per
 common share (A) $ (.13) $ .46 $ (3.96) $ 1.15
 Dividends per common
 share $ .09 $ .09 $ .27 $ .25
 Effective tax rate 31.2 pct 33.3 pct 19.8 pct 34.6 pct
 (A) Based on weighted
 average number of
 common shares
 (millions) 250.2 247.3 249.6 246.8
 (B) Restated to conform with current year's presentation including reclassification of investment tax credits from income tax provision to research and development expense.
 (C) Interest expense from prior quarters in 1993 has been reclassified between long-term debt and other interest expense.
 -0- 10/26/93
 /CONTACT: Tom Tropea or Gary Brandt of Northern Telecom Limited, 905-566-3178 or -3098/

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

MP -- NY021 -- 6761 10/26/93 09:22 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 26, 1993

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters