Nortel Posts 1Q Loss, Sales Down

Nortel Networks

For the quarter ended March 31, Nortel reported a pro forma loss of $463 million, or 14 cents per share, compared with a pro forma loss of $277 million, or 9 cents per share, the same quarter last year.

Revenue for the quarter was $2.91 billion, down from $5.75 billion the same quarter a year ago.

Wall Street analysts expected a loss of 14 cents per share on revenue of $ 2.9 billion for the quarter, according to First Call/Thomson Financial.

The Brampton-based network equipment vendor reported a loss for the quarter of $841 million, or 26 cents per share, compared with a loss of $2.6 billion, or 82 cents per share, the same quarter a year ago.

"There's a Chinese curse which says, 'May he live in interesting times.' Like it or not, those of us in the telecom industry are living in very interesting times," said Frank Dunn, president and CEO of Nortel in a conference call.

Nortel will have 44,000 employees, down from 47,000 once it completes cuts in Europe and the anticipated sale of noncore businesses, Dunn said.

The company will continue to cut spending in areas such as general and administrative costs but will make investments in areas in which it is seeing growth such as voice over IP, Dunn said.

Dunn declined to provide guidance for the second quarter.

"Clearly there's very little visibility on what our customers will spend in the marketplace and when they will spend it, so therefore I am not going to try and forecast what I believe our revenue take will be of that activity," Dunn said. "From a revenue perspective, I will tell you that I don't expect to see major falloff sequentially from the first quarter, and I also don't expect to see a major, significant upturn," he said.

Shares of Nortel Thursday closed down 12 cents at $4.04 prior to the announcement.