Nortel Networks's revenue in the first quarter was flat compared with last year's first quarter, and its losses grew wider, but the storm-tossed company is back on schedule in reporting its financial results.
Nortel's revenue totaled US$2.38 billion in the first quarter ended March 31, down just slightly from US$2.39 billion a year earlier. But it lost US$167 million, or US$0.04 per share in the quarter. In last year's first quarter, the company lost US$104 million or US$0.02 per share. An income tax expense, a charge related to a shareholder lawsuit and a gain on the sale of businesses and assets affected the first-quarter results, according to a Nortel statement.
The good news from Nortel on Tuesday was that the company is up to date in reporting its financial results after filing both Tuesday's report and its 2005 results past stock-exchange deadlines. The telecommunications equipment maker was rocked in 2003 by an accounting scandal that resulted in the firings of top executives, years of restatements of its financial results and suits by shareholders. In March this year, the company announced another set of adjustments, this time to revenue reports for 2003, 2004 and part of 2005.
In the first quarter, revenue fell slightly in both Nortel's Mobility and Converged Core Networks unit and its Enterprise Solutions and Packet Networks business. The core network unit brought in US$1.43 billion, down 4 percent from the previous year's first quarter, and the enterprise division reported US$871 million, down 1 percent. Both results were affected by the timing of certain contracts, Nortel said.
Nortel expects revenue for the full year 2006 to rise from 2005 by percentages in the low single digits.
Mike Zafirovski, the former Motorola Inc. executive who took over Nortel last October as president and chief executive officer, has led wholesale changes in the company's executive ranks and invested heavily on improving its financial organization to prevent more accounting mistakes. He also plans to cut products and businesses to refocus the company. Zafirovski said earlier this year that 1998 was the last year Nortel had "good, balanced financial performance," but that he expects to turn the company's fortunes around by 2008.