Asset sales pushed bankrupt Nortel Networks Corp. to a fourth-quarter profit but revenue still fell as customers cut spending.
Nortel earned $1.78 billion in the three months ended Dec. 31, 2009, thanks to a gain of $1.3 billion from the CDMA/LTE deal with Ericsson and another gain of $689 million from the sale of the enterprise division to Avaya Inc.
The net income compares with a net loss of $2.14 billion in the fourth quarter of 2008. But it’s important to note that was just before Nortel became insolvent in January 2009 so the comparison isn’t apples-to-apples.
Meantime, Nortel’s revenue plunged 62 percent to $794 million (down from $2.07 billion a year earlier).
For the whole of 2009, Nortel earned $488 million, compared to 2008 losses of $5.8 billion. Revenue also fell, from $7.62 billion to $4.09 billion.
Nortel has finished selling nearly all of its assets, leaving observers to speculate how the company will look. Many think the once-vaunted telecom equipment maker will turn into a patents-holder. If that happens, though, it’ll take a while. Nortel will spend about the next two years transitioning its customer contracts, back-office systems and other functions to the rivals that have purchased its divisions. And to ensure it can keep top management in place, Nortel is offering millions of dollars in incentive pay, even as thousands of pensioners and retirees face the possibility of fewer benefits.