"Curse, bless me now with your fierce tears, I pray.
Do not go gentle into that good night.
Rage, rage against the dying of the light."

-- From "Do Not Go Gentle Into That Good Night," by Dylan Thomas

Friday morning brings a first-quarter report all the way from Canada, as Toronto-based networking specialist Nortel Networks (NYSE: NT) sets up for a presentation. Last year ended badly, with job cuts and $844 million in net losses. Are we in for any surprises this week? The National Poetry Month tribute above might be a clue, but do read on.

What Fools say:
Here's how Nortel's CAPS rating stacks up against some of its peers and competitors:

Market Cap (Billions)

Trailing P/E Ratio

CAPS Rating (Out of 5)

Cisco Systems (Nasdaq: CSCO)

$153.9

20.1

*****

Motorola (NYSE: MOT)

$22.6

N/A

**

Alcatel-Lucent (NYSE: ALU)

$15.2

N/A

**

Juniper Networks (Nasdaq: JNPR)

$14.5

38.9

***

Nortel

$3.8

N/A

**

Data taken from Motley Fool CAPS on 4/30/08.

The CAPS praise for Nortel is on the faint side: A couple of players rate the stock "outperform" because the tech sector as a whole looks bound to turn up soon, and others point to various forms of technical analysis.

Our bears are more articulate this time. They base their thumbs-down ratings on fundamental financial details and on real business concerns. Aiden1976, for example, focuses on financials:

NT is not doing well on its operating cash flow. Poor debt management. Perform poorly on monthly incomes. [Don't even] mention the return of equity.

What management does:
Net profits are sporadic at best, and the company is bleeding cash, despite improving gross and operating metrics. Nortel has more long-term debt than cash on hand, and revenue growth has turned into revenue shrinkage. Ouch.

Margins

9/06

12/06

3/07

6/07

9/07

12/07

Gross

38.5%

38.9%

39.2%

39.8%

41.0%

42.1%

Operating

(1.6%)

0.1%

1.0%

1.7%

2.3%

3.7%

Net

(20.1%)

0.2%

0.8%

(2.5%)

(1.7%)

(8.7%)

FCF/Revenue

(4.6%)

(0.7%)

(3.7%)

(3.6%)

(4.5%)

(5.8%)

Growth (YOY) 

9/06

12/06

3/07

6/07

9/07

12/07

Revenue

12.7%

8.6%

9.5%

5.8%

(0.1%)

(4.1%)

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
It's hard to get excited about Nortel, even at share prices 67% below the 52-week high. The balance sheet looks shaky, as evidenced by an unusual amount of debt for a technology company and an Altman Z score of -2. Anything below +3 indicates a risky business.

Don't expect a quick turnaround here, if any at all. Nortel may be buyout bait today. A hedge fund or larger competitor could probably pick the company up for pennies on the dollar and whip its operations into shape over the next couple of years. If you're looking for an investment in communications equipment, I'm sure you can find lots of better options in the sector.

Further Foolishness:

Sign up for a free CAPS account to find out more about the Foolish player we quoted here.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.