Nortel outlines push into fast-growth markets
By Susan Taylor
OTTAWA (Reuters) - Nortel Networks Corp's NT.TO NT.N product plans will help boost sales more than 20 percent in growth markets by 2011, North America's biggest telecommunications equipment maker said on Wednesday, helping to trigger a nearly 14 percent jump in the beaten-down stock.
Nortel, which also reconfirmed its 2008 outlook on Wednesday, said that in three years it expects 60 percent to 70 percent of its products and services will go to growth markets. Last year, that figure was 38 percent.
Growth markets are expanding by at least 3 percent a year, while mature markets represent smaller gains.
"This is where we're placing our bets, this is where we're focused," chief strategy officer George Riedel told the company's investor conference. "Yes, we have to execute, but this is where we're going to grow."
Nortel has made bets in seven key areas where it expects double-digit growth, Riedel said in an interview with Reuters.
Positive news from Nortel's wireless unit also helped drive big gains in the poorly performing stock, down about 37 percent so far this year. Shares jumped nearly 14 percent to end at C$9.42 on the Toronto Stock Exchange and at $9.20 on New York.
"Given Nortel's share price, if Nortel management was able to get up and not fall off the stage, the share price probably would have gone up," said Duncan Stewart, president of Duncan Stewart Asset Management Inc., who attended the analyst event and has no position in the stock.
"They, in fact, exceeded that. They showed a coherent and reasonable plan, that while I think unlikely, is possible." Continued...