Feeds

Nortel hammered again

Warns on costs, job cuts likely

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Nortel saw its shares fall sharply yesterday after the company warned it had more work to do on cutting costs and improving margins.

Shares fell 15 per cent to $3.51 after the firm said sales were holding up, but it was not making enough progress in improving margins. Last month it sold off its manufacturing plants to Flextronics. The company is still working on restating its accounts for the last three years. Nortel is under investigation by US regulators and the Mounties. It is also facing class action suits from investors.

Bill Owens, president and CEO of Nortel Networks, said: "I remain pleased with Nortel Networks market momentum and continue to expect our revenues in 2004 to grow faster than the market (which we expect will grow in the low to mid single digits).

"However, as we move through 2004 and based on the work to date on our financial results, it is clear that our business model is not achieving our targeted operating cost (SG&A and R&D) performance of below 40 per cnet of overall revenues and our targeted gross margin percent of mid 40s."

Owens will detail the cost-cutting plans in mid-August when the company releases results for the first half of 2004. Canadian regulators insist Nortel update the market every two weeks. The full statement is here. ®

Related stories

No news is good news for Nortel
Nortel flogs factories to Flextronics
No news is bad news for Nortel
Nortel re-restates results, fires CEO

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Fast And Furious 6 cammer thrown in slammer for nearly three years
Man jailed for dodgy cinema recording of Hollywood movie
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
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.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Scale data protection with your virtual environment
To scale at the rate of virtualization growth, data protection solutions need to adopt new capabilities and simplify current features.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?