Nortel Networks Corp. announced on Friday it anticipates a less-than-forecast loss from operations in its fourth quarter, and an amended credit agreement designed to improve its cash position.
The Toronto, Canada telecommunications-equipment maker announced that it anticipates revenues of $3.4 billion and a pro forma net loss of 16 cents per share. Analysts surveyed by Thomson Financial/First Call were expecting a net loss of 18 cents.
Overall, Nortel said its loss would be 63 cents per share with charges included, such as $900 million in acquisition and write down costs and $630 million for charges related to workforce reductions.
At the end of the year Nortels workforce will be approximately 52,000. Nortel revised its estimates of its final workforce once it completes restructuring from 45,000 to 48,000.
In other news, Nortel also amended a $2 billion credit agreement, extending its term with all of the companys creditor banks from June 14, 2002 until December 13, 2002, and reducing the amount from $2 billion to $1.58 billion.
The agreement requires Nortel to maintain a minimum consolidated tangible net worth and to achieve certain earnings thresholds after allowances for interest, taxes, depreciation and amortization.
Nortel said the agreement provides it with a significant source of liquidity if necessary.
“We are pleased with the extended term of the amended credit agreements,” said Terry Hungle, Nortels chief financial officer in a prepared statement. “At the reduced level, we believe that the amount of this facility is appropriate for Nortel Networks in light of the progress that we have made on our work plan, the results of our ongoing focus on cash management and our current cash position.”
At the close on Friday, Nortel stock was up 77 cents to $7.13, or 12 percent.