Nortel Networks has further lowered its revenue expectations for the third quarter, saying it expects to take in approximately 15 percent less this quarter than it did in this year's second quarter, according to a release issued Thursday.
The company posted revenue of US$2.77 billion in the second quarter of this year. Third-quarter revenue in 2001 was $6.73 billion, but the networking and telecommunications companies that make up Nortel's major customers are not spending this year, especially U.S. service providers and wireless network providers in Asia, the company said.
Nortel posted revenue of $7.31 billion in the third quarter of 2000, but has been cutting costs and jobs and has seen revenue steadily decline amid a collapse of the telecommunications industry. Lower revenue is also the result in part of reduced ownership in joint ventures and efforts to divest certain businesses.
Nortel, based in Brampton, Ontario, initially predicted flat third-quarter revenue growth when it released its second-quarter results in July, but revised those estimates down 10 percent in August. The company will also look to execute a reverse stock split, consolidating its existing shares. It will present a plan to its shareholders at its annual meeting in the second quarter of 2003 to bring the stock back to a range of $10 to $20, it said.
The move would allow Nortel to avoid having its stock delisted by the New York Stock Exchange (NYSE), it said. Stocks that trade below $1 are subject to delisting by either the NYSE or the Nasdaq stock markets. Nortel's stock (NT) closed at $0.64 Wednesday, and was down $0.10 in early morning trading Thursday.