May 2, 2008 / 12:33 PM / in 9 years

CORRECTED - UPDATE 2-Nortel's loss widens but has targets in sight

(Recasts paragraphs 4,5 to correct sourcing of 5 cents figure)

(In U.S. dollars; adds estimates)

TORONTO, May 2 (Reuters) - Nortel Networks Corp NT.TONT.N posted a steeper first-quarter loss on Friday as a series of charges weighed on results, but the telecommunications equipment maker said it still expects to meet its full-year targets.

Nortel reported a loss of $138 million, or 28 cents a share, compared with a loss of $103 million, or 23 cents a share, a year earlier.

The latest results included a number of one-time items, including special charges of $88 million for restructuring, a charge of $12 million related to a patent lawsuit settlement, and a loss of $19 million due to changes in foreign exchange rates.

Excluding these items, the company said it lost 5 cents a share.

Reuters Estimates said that its estimate of the loss had been 7 cents a share, excluding items, compared with analysts’ average forecast of 14 cents. The reasons for the discrepancy were not immediately clear.

Revenue was $2.76 billion, up 11.1 percent.

The 2007 quarter included special charges of $80 million for restructuring.

Toronto-based Nortel has spent the majority of this decade trying to repair itself after the technology bubble burst in 2001, taking the company’s fortunes with it. It has thus far failed to return to profitable growth, despite thousands of layoffs and the efforts of several different management teams.

In late February, it said it would slash an additional 2,100 jobs as it copes with persistently weak demand for the equipment it produces.

Despite the weak quarter, Nortel said it expects to achieve its full-year forecast for revenue growth in the low single digits, gross margin of about 43 percent of revenue, and operating margin as a percentage of revenue to increase by about 3 percentage points. ($1=$1.02 Canadian) (Reporting by Scott Anderson, additional reporting by Christopher Kaufman; Editing by Derek Caney and John Wallace)

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