Nortel Networks Corp. on Thursday met earnings expectations for its fiscal fourth quarter 2001. The Toronto, Ontario maker of network infrastructure equipment also recorded a huge loss for the quarter, and predicted more revenue woes to come, but sees a return to profitability in late 2002.
On revenues of $3.46 billion - down from $8.2 billion in revenue in the same quarter a year ago - Nortel reported for its fiscal 2001 fourth quarter a loss of $1.83 billion, or 57 cents per share. This is according to generally accepted accounting principles, the standard measure for Nortels earnings statements.
Translated into pro forma calculations, which exclude certain one-time charges, such as acquisition related costs, loss on the sale of businesses, and other items, Nortel said it lost $506 million or 16 cents per share. Those earnings were in line with pro forma estimates by analysts surveyed by Thomson Financial/First Call.
Nortel said that continued slow spending by telecommunications customers will take a toll on company revenue in its first quarter of 2002. Nortels President and CEO Frank Dunn estimated a reduction of ten percent from this quarter.
"At this time, market visibility remains limited given the uncertainty of the economic downturn and its impact on our customers businesses and spending plans," said Dunn in a written statement. "As a result, we expect customers to move cautiously in the near term while maintaining the flexibility to increase spending in the future."
Nortel took a big hit in optical long-haul networks sales, declining 39 percent from the last quarter and 89 percent from one year ago.
Metro and Enterprise Networks revenues increased 8 percent from the third quarter, "reflecting considerable increases in metro optical and circuit to packet and a significant increase in packet networking and services, which more than offset a slight decline in circuit switching," the company said. But those revenues are still down 53 percent from this time in 2000.
Wireless Networks segment revenues decreased 11 percent from the previous quarter, and are down 21 percent from this time in 2000.
Nortel has cut nearly 42,000 employees over the course of the last year as a result of the now-infamous telecommunications sector slump.
"One of our top priorities is to re-energize our people after what they went through in 2001. I personally feel very sorry for what has happened and apologize to shareholders and employees," Dunn said in a Thursday conference call with investors. Dunn took the reigns of Nortel in the fall of last year.