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Investing

Nortel (NT) And Alcatel-Lucent (ALU): Bad News For Telecom Infrastructure

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By Douglas A. McIntyre Published

Nortel (NT) turned in bad numbers. According to The Wall Street Journal "the company said the quarterly net loss was $37 million, or seven cents a share, compared with net income of $342 million, or 79 cents a share, in the second quarter of 2006." And, revenue dropped.

The news for Alcatel-Lucent (ALU), a Nortel competitor, was just as bad. The company’s stock is down almost 20% in the last month.

Telecom companies were supposed to be spending a lot of money on high-speed infrastructure and cell networks. But, that did not show up in Nokia’s (NOK) earnings either. It joint venture with Siemens (SI). According to MarketWatch, NOK said "the JV business underperformed in the quarter and that pricing on some contracts was extremely aggressive."

All of this could spill over to Motorola’s enterprise telecom equipment business as well. With the company’s handset problems, the firm does not need trouble in another big division.

But, the telecom enterprise equipment business is not going well. Either the customer base is delaying capital spending, or price ware are heating up.

None of that is going to get better anytime soon.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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