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11/2/2005
12:21 PM
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Brief: Nortel 3Q Loss Narrows Despite Charges

The communications company posted a third-quarter loss of $105 million, or 2 cents per share, on sales of $2.66 billion, compared with a net loss of $259 million, or 6 cents per share, on sales of $2.18 billion in the year-ago quarter.

MANHASSET, N.Y. — Communications company Nortel Networks Corp. posted a third-quarter loss of $105 million, or 2 cents per share, on sales of $2.66 billion in the third quarter, compared to a net loss of $259 million, or 6 cents per share on sales of $2.18 billion in the year-ago third quarter.

The third-quarter loss included special charges of $37 million related to restructuring activities and a net charge of $20 million related to the re-filing of Nortel’s tax returns as a result of the financial restatements. Third-quarter results also included adjustments related to prior periods that increased the net loss by $15 million.

Nortel (Toronto) saw double-digit, year-over-year increases in revenue for carrier packet networks, enterprise networks, and GSM and UMTS networks, and a slight increase in CDMA network revenue. Gross margin was 38 percent of revenue.

Last month, Nortel chief executive Bill Owens announced he would leave the company, with former Motorola executive Mike Zafirovski replacing him.

For the fourth quarter, Nortel expects revenue to grow 13 percent year over year, with gross margin of 40 to 44 percent.

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