Nortel Networks Corp. on Thursday revised its expectations for first-quarter earnings, citing a "severe" U.S. economic downturn. The networking equipment vendor also said it would lay off approximately 10,000 employees in 2001, more than it had previously indicated.
"While we previously noted that economic uncertainties and capital constraints were impacting our outlook, we are now seeing a faster and more severe economic downturn in the United States which we now expect will result in a slower overall market growth of approximately 10 percent in 2001," John Roth, president and chief executive officer of Nortel, said in a statement.
For the first quarter of 2001, ending March 31, Nortel now expects to report revenue of US$6.3 billion [B] and a loss per share from operations of $0.04. That's a substantial drop from the $8.1 billion [B] revenue and $0.16 per share earnings that Nortel said it expected to report just last month.
At that time, officials also said Nortel planned to cut 4,000 jobs in low-growth areas. [See "Nortel meets Q4 expectations, on target for 2001," Jan. 18.]Nortel still expects its revenue and earnings per share from operations in 2001 as a whole to increase from a year earlier by 15 percent and 10 percent, respectively, the company said.
Nortel, in Brampton, Ontario, can be reached at +1-905-238-7000, or via the Web at http://www.nortelnetworks.com/.