Feeds

Nortel reaches rock bottom

And gets its pick axe out

  • alert
  • submit to reddit

Build a business case: developing custom apps

Nortel Networks has revised its forecasts to warn of deeper net losses of $3.6 billion on lower than expected revenues of $3.5 billion.

Nortel's losses include restructuring charges of $735 million, extraordinary charges of $1.3 billion and ongoing amortisation of intangible assets of $650 million, as well as operating losses of $910 million.

Along with the profit warning, Nortel announced a major management overhaul that sees John Roth replaced as chief executive by chief financial officer Frank Dunn from November 1. Roth will remain vice-chairman until 2002, while Terry Hungle will take over the chief financial officer role.

Nortel tried to put a positive spin on the news by stating that its restructuring plan is going well and that it expects to have a structure in place that will allow it to breakeven by the first quarter of next year on quarterly revenues of "well below" $4 billion. It previously thought it could break even on quarterly revenues of $5 billion.

Further job cuts and divestment of non-core businesses (involving perhaps 10,000 workers) will leave Nortel with a headcount of just 45,000.

The Canadian telecoms manufacturer will concentrate its business on three main areas optical long haul networks wireless networks and metro networks.

The collapse of competitive carriers and dotcom firms in the States, has had a calamitous effect on networking firms, while a slowdown in IT spending in general has piled on the misery. Nortel failed to give any firm indication of when it expects matters to improve and in a conference call declined to give any guidance for its fourth quarter. ®

External Links

Nortel's latest warning

Related Stories

Nortel posts losses of $19.6bn
Nortel axes 10,000 more jobs
Nortel in the poo
MemoWatch Nortel 're-aligns' 10,000 employees
Battered, bothered, bewildered - Nortel and Lucent shareholders
Lucent to restate sales and cut 10,000 jobs
Marconi set to announce loss of 3,000 jobs
Cisco splits into 11 technology groups
Cisco loses $2.69 billion on declining sales
Where have all the Cisco customers gone?

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.