Nortel posts small loss on weaker revenue

Revenue slipped in the second quarter of 2003 for Nortel Networks Corp., but the telecommunications equipment vendor's net loss narrowed to US$14 million, and it broke even in terms of per-share earnings, the company announced Thursday.

Nortel had worldwide revenue of US$2.23 billion for the quarter, down from $2.77 billion in the same quarter last year and $2.4 billion in the first quarter of 2003. However, the company rebounded from a loss of US$697 million, or US$0.20 per share, in last year's second quarter, according to a company statement.

Analysts had expected Nortel to break even in earnings per share with revenue of about US$2.4 billion. Along with most of the telecommunications equipment industry, Brampton, Ontario-based Nortel in recent years has struggled with a steep decline in capital investment by service providers.

The net loss is based on U.S. Generally Accepted Accounting Principles (GAAP) and includes a US$37 million charge for amortization of acquired technology and deferred stock option compensation associated with acquisitions. It also includes US$5 million of special charges for restructuring and a pretax benefit of about US$51 million related to customer financing provisions.

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