TORONTO — Nortel Networks Corp., a major telecom equipment company now operating under bankruptcy protection, said its fourth-quarter loss widened as the weak economy led customers to lower or defer spending.
Toronto-based Nortel on Monday reported a loss of $2.14 billion, or $4.28 per share, compared with a loss of $844 million, or $1.70 per share, a year ago.
Nortel filed for creditor protection Jan. 14 in Canada and the United States, becoming the first major technology company to take that step in this global downturn.
Chief Executive Mike Zafirovski said that the company is working on a plan that will allow it to emerge from bankruptcy protection as a viable business. Nortel announced last week it plans to cut its work force by 3,200 jobs worldwide.
Revenue fell 15 percent to $2.72 billion from $3.2 billion in the same quarter in 2007.
“The market continued to deteriorate and customers either reduced or deferred spending,” Zafirovski said in a statement.
Nortel did not schedule a conference call with investors and analysts and declined to give guidance, citing limited visibility, the continuing uncertainty of the economy and its work to restructure the company.
Nortel said Pavi Binning, chief financial officer, will take on the duties of chief restructuring officer.
Henry Dewing, a Forrester research analyst, said the move suggests Nortel will attempt to sell off some assets.
But, he added, “They are not disappearing.”
Dewing said he expects Nortel to emerge as an important player in the telecommunications industry but said it’s an open question whether the company will be as prominent as it once was.
The company said its fourth-quarter loss included a $1.24 billion non-cash writedown of its goodwill and a $951 million non-cash charge to raise the valuation allowance against deferred tax assets.
When excluding one-time items such as these, Nortel earned 36 cents per share.
For the full year, Nortel reported a loss of $5.8 billion, or $11.64 per share, compared with a loss of $957 million, or $1.98 per share, in 2007. Revenue slid 5 percent to $10.42 billion from $10.95 billion.
The company said that starting with its current quarter it will report financial results under a new operating model that includes four business segments, each of which will include related results that used to be reported through its global services segment. The business segments are: Carrier networks, enterprise solutions, metro ethernet and the LG-Nortel joint venture.
Nortel employs more than 25,000 people around the world. During the 1990s telecom and Internet boom, Nortel had more than 95,000 employees. At one point in 2000 it accounted for one-third of the market value on the entire Toronto Stock Exchange.
After the dot-com bust, Nortel had problems of its own: an accounting crisis that sparked shareholder lawsuits, regulatory investigations and the firing of key executives, including CEO Frank Dunn.
