Nortel's Q1 sales up 11%

Nortel reported first quarter sales of US$2.76 billion (€1.778 billion), up 11% from a year earlier. Results were boosted by the release of deferred revenue from a contract at its venture LG Nortel.

Sales at carrier networks rose 21% to US$1.218 billion, enterprise solutions grew 7% to US$641 million (€413 million) and global services were up 15% to US$516 million (€3.325 million). Metro Ethernet networks fell 12% to US$327 million (€210.7 million).

The company posted an operating margin of 4.7%, an improvement from minus 0.4% last year, but down from 7.6% in Q4. The net loss widened to US$138 million (€88.9 million) from US$103 million (€66.36 million) a year ago, largely due to charges of US$88 million (€56.7 million) for restructuring and US$12 million (€7.73 million) for settling patent litigation.

Nortel insists its restructuring plans are on track and confirmed its prediction of low, single digit growth this year and a 300 point increase in operating margin.