Networking equipment vendor Nortel Networks Corp. Thursday reported widening losses of US$3.47 billion for its fiscal third quarter 2001, as the company continues to chip away noncore businesses in a bid to improve efficiency.
Revenue for the three months ended Sept. 30 plummeted to $3.69 billion, down almost half from the $6.73 billion reported in fiscal 2000, the company said in a statement.
Sales were dashed by reduced levels of spending among telecommunication customers, while profits were hurt by costs related to layoffs and other ongoing restructuring efforts designed to help streamline the company, Nortel said.
Nortel warned in October that it would report a big loss for the quarter, and said it would cut 10,000 more jobs as it tries to prune its worldwide workforce to 45,000. The company has also shuffled its top management this year as it seeks to narrow its focus to three main areas of business: optical long-haul networks; wireless networks; and metropolitan networks, including optical and IP (Internet Protocol) network services for corporations and service providers. The net loss of $3.47 billion includes acquisition-related costs, stock option compensation, and one-time gains and charges, and translated into a loss per share of $1.08, Nortel said. That's far wider than its loss of $586 million, or $0.17 per share, reported in the same quarter a year ago.
The pro forma net loss from continuing operations, excluding "incremental provisions" and other charges, was US$854 million, or $0.27 per share. Analysts had been expecting a loss of $0.28 per share, according to a poll by First Call/Thomson Financial.
The incremental charges include a write-down of $750 million for excess and obsolete equipment, primarily related to its Optical Inter-City products; as well as a pretax charge of $801 million for the layoffs and site closures announced in June, Nortel said.
Nortel's shares on the New York Stock Exchange were at $5.66 in mid-Friday afternoon trading, down 4.4 percent from the previous day's close, and well off the 52-week high of $70.