Zafirovski Upbeat

Nortel CEO Mike Zafirovski kicked off the company’s annual investor day with his typical mixuture of enthusiasm, bullishness and optimism. While conceding there had been some challenges along the way as Nortel re-invents as its operates, and the telecom equipment market is extremely competitive, he said sales should growth by at least 7% in 2007, while gross margins have stablizied at 38% to 39%. Tags:

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4 Responses to “Zafirovski Upbeat”

  1. Observer Says:

    And the market should believe this like his optimsim in the balance of 2003 or downplaying revisions that doubled, or as much as Motorola did, etc… Sure

    Seems what they claim works best, not what actually transpires, with an exhuastive list of contadictions coming in like punch lines at this point and so much more to come.

  2. Apple Says:

    You did not mention R&D plans for restructuring, you did not mention that Mike was confident 2005 restatements were caused by an honest accounting mistake, even if there was no investigation to determine the cause, you did not mention, Mike was sure to improve margins /the opposite is true as margins are lower again/
    He shows strong optimism and at the same time he sold his shares on Nov15!
    15-Nov-06 ZAFIROVSKI MIKE S
    Officer 180,706 Direct Sale at $2.07 per share. $374,061

  3. Observer Says:

    Excellent point and you are absolutely correct.

    They contradicted the long boasted R&D cuts just as boasted Neptune and other product cut following BT’s major exclusion from a $19B tender. (Their last large order was BSNL that lost hundreds of millions to rival the cash bonuses they still keep for a year worse every time they count it.)

    Large R&D, large pension shortfall, large fraud setlement, etc., what is “large” is not good news. Even their largest asset is now a tax write off after exhausting all else to the point of selling part of the business.

    Also good point in the further suprise of recent revisions they added “no gurantees” to. These revisons increasing literally by the week to the point where I dread to see what another week would have furnished!

    The estimated revisions he initially downplayed doubled which increased antsy creditor collateralization by 50% they issued high risk/high interest B3 rated bonds to pay and further burden their already negative cash flow, with deteriorating margins and increased SGA as reported in their most recent unreliable financials.

    These $2B in bonds also paid the $575M cash portion of the fraud settlement, where fraud cost them nothing thanks to the insurance company kicking in a few hundred million bucks, tanking shares intially worth almost $2B agreed to in principal with one sole lead plaintiff holding majority of shares and a vested interest, NT called “fair” agter tripping over theiur feet to settle only to tank them by their direct actions of revisions.

    Mike also downplayed further penalty to these revisions with so many still there and ongoing regulatory and criminal investigations to see how far up the chain of command this went, always overstating never under, claiming the work was already done when clearly, these revsisions were brand new.

    Interesting they had such a strong reluctance to chase past officers while defending other plea bargained timeley resigned others, resulting in a dervative class action.

    I also agree in that selling shares right after announcing a reverse split which tanks a stock 75% of the time does add further suspicion to their ongoing management pay practices and proverbial optimsim that is traditionally shattered since he was optimsitic for the balance of 2006 with one wuarter to go and who knows how much worse without money from these revsions moved forwards.

    Too much remains seemingly suspect where circumventing or inhibiting exposing commentary would be a grave injustice indeed. What ever happened to cbc’s site on Nortel’s history for example! Gone! Why?!

  4. Observer Says:

    Just a quick update, the cbc site on Nortel’s history. It must have been down the other day as it is up again today strangely enough.

    http://www.cbc.ca/news/background/nortel/

    A lot has transpired since this article but it makes for a facinating read nonetheless.

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