Nortel CEO 'Sorry' For 2001 Events

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Nortel is happy to close the books on 2001 and looks forward to a gradual return to profitability this year, said Frank Dunn, president and CEO of the company.

The networking hardware vendor Thursday reported revenue from continuing operations of $3.46 billion for the fourth quarter of 2001, compared with $8.2 billion for the year-earlier quarter.

Nortel posted a net loss of $1.83 billion in the quarter, or 57 cents per share, compared with a loss of $1.4 billion, or 46 cents per share, a year earlier.

The loss includes acquisition-related costs of $482 million, a loss on sale of businesses of $215 million, and special charges of $605 million related to workforce reductions and associated facilities closures.

The results are in line with revised estimates Nortel provided to the financial community on Dec. 21.

Speaking to investors on its quarterly earnings conference call Thursday, Dunn said he expects Nortel to return to profitability by the fourth quarter of 2002, but he doesn't expect any dramatic turnaround in the economy.

"This year is not going to be a cinch for any company in our industry," Dunn said. "We expect continued caution from our customers, especially in the near term."

Dunn said Nortel expects sales for this quarter to be about 10 percent less than the previous quarter, with gradual growth in the second, third and fourth quarters this year and a return to profitability in the fourth quarter.

The past year was a tough one for Nortel, Dunn said. "There is no question that the events of 2001 have caused hardship for both our employees and our shareholders," he said. "One of the hardest decisions we made was the resizing of our workforce."

Nortel finished 2001 with about 52,000 employees, down from about 95,000 at the beginning of that year.

"I personally would be remiss if I didn't offer an apology to employees and our shareholders," Dunn said. "I am sorry."

A top priority this year will be to "re-energize the spirit of our people after what happened in 2001," Dunn added.

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