Nortel Bankruptcy and Costs Pushes Alvarion into Quarterly Loss

February 5, 2009 at 13:21 Leave a comment

Israeli WiMAX vendor, Alvarion, which recently had to break up its mobile WiMAX deal with Nortel has swung into a fourth-quarter loss due a restructuring charge and the Nortel problem. The firm reported a quarterly loss of US$4.8 million, compared to a profit of US$12.4 million a year ago. Revenues rose 6 percent to $70.1 million, a decrease of 6% from $74.3 million in the third quarter of 2008, and increase of 6% from $66.3 million in the fourth quarter of 2007.Excluding a restructuring charge of US$3.4 million and other one-off items, the company reported a net income of $119,000, down from $3.1 million a year ago.

The sequential decline in revenues was primarily a result of Alvarion’s inability to recognize $2.4 million of revenues from the sale of products to Nortel Networks during the fourth quarter of 2008 after Nortel filed for bankruptcy protection in January and subsequently repudiated the joint WiMAX agreement between the two companies. The decline in Q4 gross margin was due to the write-off of the cost of the equipment related to the Nortel sales in the period.

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Entry filed under: Alvarion, Financial, Israel, WiMAX. Tags: , , , .

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