Nortel's bankruptcy impacts Alvarion financial results

Nortel Networks' bankruptcy impacted Alvarion's fourth-quarter results as the WiMAX vendor reported a net loss of $4.8 million, or 8 cents per share, on revenues of $70.1 million.

Because of Nortel's bankruptcy and the fact it ended its WiMAX partnership with Alvarion, fourth quarter revenues were down 6 percent on a sequential basis for Alvarion. Nortel filed for Chapter 11 bankruptcy protection in January. As a result, Alvarion was unable to recognize revenues of $2.4 million from equipment sales to Nortel in the fourth quarter. The WiMAX vendor also wrote off the cost of equipment related to the Nortel sales, which impacted the vendor's margins in the quarter.

In addition, Alvarion's fourth-quarter loss included a restructuring charge of $3.4 million for expenses to the company's cost reduction program in December. That plan included the elimination of 110 jobs.

Still, Alvarion is bullish on the WiMAX market going forward. Revenues were up 6 percent compared with the fourth quarter 2007, while WiMAX revenues increase 21 percent to $43.9 million compared with the previous year. The vendor says its 2008 WiMAX revenues set a new record for the company at $171 million, which was an increase of 38 percent.

Alvarion president and CEO Tzvika Friedman said the company had a "backlog of business twice as large" as it was this time last year.

"While decision cycles may lengthen and funding will remain an issue, we believe opportunities for a company our size remain abundant... Our goal for 2009 is to improve profitability for the year, even as growth slows temporarily due to global economic conditions," he said.

For more:
- see Unstrung [1]

Related articles:
Nortel exits mobile WiMAX [2] business
Alvarion to cut jobs [3], costs amid uncertain 2009
Nortel shifts its focus from WiMAX to LTE [4]
Nortel files for bankruptcy protection [5]