Nortel issues warning, cuts staff . . . again

Nortel Networks added to fears of an ever-worsening US economy on Tuesday, as the vendor issued a warning predicting lower than expected first-quarter financial results and said it will lay off a further 5,000 staff.

Nortel now expects revenue of between US$6.1 billion and $6.2 billion in the quarter, which ends March 31. These totals would translate into a loss per share of around $0.10 to $0.12 for the period.

The vendor previously expected revenue of $6.3 billion or a loss of $0.04 per share. The consensus estimate by analysts polled at First Call/Thomson Financial pegged Nortel to lose $0.03 during the first fiscal quarter.

The networking equipment vendor is due to report its results April 19.

Nortel had revised its first-quarter estimate once already, in February, when it said it would eliminate 10,000 jobs. The company continues to see a worsening US economic climate that now appears to be carrying to overseas segments as well, according to a statement. Nortel will now cut another 5,000 jobs to offset its mounting losses. The layoffs should be completed by mid-year, the company said.

Shares of Nortel (NT) dipped just 0.95 percent during the day's trading to close at $16.76 per share. In the after hours markets, however, the company's stock tumbled more than 12 percent.

Nortel, in Brampton, Ontario, can be reached at +1-905-238-7000, or via the Web at http://www.nortelnetworks.com/.

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