Nortel earnings and income decline in fourth quarter

Nortel Networks reported net income of $133 million and revenue of $2.62 billion for the fourth quarter, both down from the year-earlier period.

Nortel Networks' net income and revenue for the fourth quarter of 2004 both declined compared to a year earlier, but increased compared to the third quarter, the company said Monday.

In 2005, however, the company expects revenue to grow and costs to fall as a result of the company's restructuring efforts.

Nortel is slowly catching up with its financial reporting, after having to restate results for the whole of 2001 through 2003. It reported results for the first half of 2004 on Feb. 2, and for the third quarter on March 22. It restated the earlier years' figures in January in response to an investigation of its books by U.S. and Canadian regulators.

For the three month to Dec.31, revenue totalled US$2.62 billion, down from $3.27 billion in the year-earlier quarter but up from $2.18 billion in the third quarter of 2004, the company said. Net income for the fourth quarter, at $133 million was down sharply from the $528 million reported for the corresponding quarter in 2003, but up from the net loss of $259 reported in the third quarter of 2004, it said. The figure for net income included restructuring charges of $81 million, the company said.

Wireless network equipment revenue totalled $1.28 billion, down 11 percent on the year-earlier quarter, while enterprise network revenue slumped 31 percent over the year, to $651 million. Fixed-line network revenue dropped 19 percent to $461 million and optical network revenue declined 28 percent to $226 million.

For the full year 2004, the company reported revenue of $9.83 billion, down from $10.19 billion in 2003, and a net loss of $51 million, down from net income of $434 million for the previous year.

In the year ahead, the company expects to see growth in metropolitan optical networks and in 3G (third-generation) wireless and wireless LAN networks.

The company maintained its level of research and development spending at $494 million for the quarter, compared to $520 million a year earlier.

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