Nortel Networks Corp. yesterday reported second-quarter 2002 earnings in line with previous guidance and analyst expectations, with revenue totaling $2.77 billion. That compared to $4.61 billion in the same period in 2001.
Nortel posted a net loss in the second quarter of this year of $697 million, or 20 cents per share, compared to a net loss of $19.4 billion, or $6.08 per share, in the second quarter of 2001.
"I'm pleased with the progress we have made amidst the challenging industry contraction," Frank Dunn, Nortel's president and CEO, said in a statement. "We continued to make significant progress in repositioning our business model and addressing our priorities to return to profitability in the near term."
Dunn said he expects revenue in the third quarter of 2002 to be essentially flat with the second quarter, with ongoing sequential improvement in Nortel's bottom line in both the third and fourth quarters of 2002.
Revenue totals reflect Nortel's realignment of the metro optical portion of its Metro and Enterprise Networks business segment into the Optical Long Haul Networks segment, which is now called Optical Networks.
For the first half of 2002, revenue totaled $5.68 billion, compared to $10.36 billion for the same period in 2001. Nortel posted a net loss for the first six months of 2002 of $1.54 billion, or 46 cents per share, compared to $22 billion, or $6.94 per share, in the first six months of 2001.
Pro forma net loss for the first half of 2002 was $786 million, or 24 cents per share, compared to $1.82 billion, or 58 cents per share, for the same period in 2001.
PeopleSoft sees revenue, profits drop
Business applications maker PeopleSoft Inc. saw a 23% dip in profit for the second quarter, which it blamed on the bad IT spending environment.
The Pleasanton, Calif.-based company announced late yesterday that it had net income of $36 million on revenue of $482.2 million, down from net income of $47 million and revenue of $544.5 million in the same quarter of 2001.
Software license fees fell from $166,305 in 2001 to $131,929 in 2002, a decline of 20%.
The company noted in a statement, however, that its second-quarter operating income from recurring operations, which totaled $60 million, had improved 5% over the prior year.
"PeopleSoft delivered a solid financial performance in a tough economic environment," said Craig Conway, CEO and president of PeopleSoft. "We continue to demonstrate that PeopleSoft can navigate well in all market conditions and deliver predictable earnings. ... While the market remains challenging, PeopleSoft is winning proportionately more deals and gaining market share in all of our product lines."
PeopleSoft cut deals in the second quarter with the U.S. Department of Defense, the state of North Dakota, and Sun Microsystems Inc., among other customers.
Transmeta to lay off 40% of workforce
Transmeta Corp. yesterday posted a slightly smaller-than-expected loss for its second fiscal quarter, but at the same time announced plans to lay off 200 workers, or about 40% of its workforce.
The company also said in a statement that it no longer plans to offer a version of its Crusoe processor called the TM6000. Transmeta will continue to improve its current model, the TM5800, and work with customers to develop "future system-on-a-chip" products.
For the three months that ended June 28, the company posted a net loss of $35.6 million, or 27 cents per share, on revenue of $7.5 million. The deficit was narrower than that of a year ago, when Transmeta lost $69.3 million, or 54 cents per share, but revenue was lower than last year's total of $10.5 million.
On a pro forma basis, excluding restructuring costs, the Santa Clara, Calif., company lost $24.7 million, or 18 cents per share, Transmeta said. Analysts polled by First Call/Thomson Financial had predicted on average a pro forma loss of 19 cents per share.
The layoffs are expected to lower the company's operating expenses to around $20 million per quarter by the fourth quarter of 2002, Transmeta said. Its operating expenses in the second quarter were $38.8 million.
"The actions will help us to streamline the company, while helping us reach our goal of profitability by the fourth quarter of 2003," Matthew Perry, president and CEO of Transmeta, said in a conference call after the results were announced. "We are operating our business as if there will be no upturn in the economy and planning very conservatively."
Crusoe is a chip for notebook PCs and other portable computers that uses very little power, producing a long battery life. Overall PC growth has been slow, but notebooks are growing at a faster rate than desktop PCs, which gives Transmeta hope for the future, Perry said.
Transmeta said it spent $19.1 million on research and development in the second quarter, up from $17 million in last year's second quarter.
Looking forward to the third quarter, Transmeta expects revenue growth of between zero and 5%. The company will take a one-time restructuring charge of $4 million to $4.5 million in the third quarter for the payment of severance and benefits.
Computerworld reporter Marc L. Songini contributed to this report.