Nortel Networks (NT ) lowered its third-quarter revenue outlook. Banc of America cut its estimates on Nortel.
Analyst Tim Long says Nortel stated that although the industry looks stronger, it now expects to grow slower than the market in 2004. Long says he is not surprised by the miss, given the all weak data points from its supply chain. Based on his slightly more conservative view, he cut his 2004 estimates for EPS from 6 cents to 4 cents and for sales, from $10.7 billion to $10.3 billion. He cut his 2005 forecasts for EPS from 17 cents to 14 cents, and for sales, from $11.4 billion to 10.9 billion. He kept his $4 target price -- 20 to 25 times his new 2005 EPS estimate. Long notes management recently stated it expects to release full results in October, instead of September; he believes this release can remove some overhang from the stock.