Nortel loss deepens as revenue falls 37 percent

Mon May 11, 2009 11:02am EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - Nortel Networks Corp, which filed for bankruptcy protection earlier this year, said on Monday its quarterly loss widened as the global recession contributed to a steep drop in revenue.

Nortel, North America's biggest maker of telephone equipment, also said it is completing plans to decentralize some functions at each of its four main businesses to give it more flexibility as it decides which divisions to sell.

The company lost $507 million, or $1.02 a share, in the three months ended March 31. That compares with a loss of $138 million, or 28 cents a share, a year earlier.

Revenue fell 37 percent to $1.73 billion with declines in all segments and regions, the company said. Analysts on average had expected Nortel to post revenue of $2.32 billion, according to Reuters Estimates.

The company blamed the drop on the weak economy and its bankruptcy filing, which rattled the confidence of some customers.

Chief Executive Mike Zafirovski said in an interview that revenue stabilized after January and began to track higher in February and March, adding: "I am cautiously optimistic that the worst is behind us."

Nortel filed for bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Since then, there has been widespread speculation among analysts and in media reports that the company may be sold off in pieces rather than revived as a viable stand-alone entity.   Continued...

<p>A Nortel sign is seen in downtown Toronto February 27, 2008. REUTERS/Mark Blinch</p>