Losses pile up at Nortel
More depressing than a Leonard Cohen song
Nortel Networks has reported Q3 net loss of $3.47 billion on declining sales as demand for its kit from telecoms carriers continues to remain modest and difficult to predict.
The disappointing results came as little surprise - the Candian telecoms equipment manufacturers issued profit warning earlier this month - and show that incoming CEO Frank Dunn has his work cut out implementing the firm's ongoing restructuring.
Nortel Q3 revenues from continuing operations were $3.69 billion compared to $6.73 billion in the year-ago quarter, continuing a loss-making run that continues back to last year.
The firm is cutting staff and restructuring so that it can reach break-even at a quarterly of $4 billion and expects to have finished this painful process by the first quarter of 2002. By this point Nortel expects to have a workforce of 45,000.
After it divests itself of non-core businesses (which will affect around 10,000 people), Nortel will focus on metro networks (which encompasses metro optical networking, IP networking, IP services and voice over IP products ), wireless networks and optical long haul networks.
Dunn, who replaces long-standing Nortel chief executive John Roth on 1 November, said the firm was seeing "early indications that capital spending by service providers is approaching sustainable levels" but he said demand was still difficult to predict. Because of this, and the overall slowdown in IT spending, Nortel is not providing predictions for its fourth quarter results or 2002 as yet. ®
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