Nortel Networks Corp. (NYSE/Toronto: NT) lived up to lowered expectations with its earnings announcement today (see Nortel Issues Mediocre Q1 Results).

In an interesting twist, Nortel, which late last year badly missed its projected earnings and revenue numbers, is now declining to give investors any guidance for their financial performance in 2001.

Nortel's revenues for its first fiscal quarter of 2001 were $6.18 billion, a 2.2 percent decrease from the year-ago period's $6.32 billion, but in line with the warning the company issued three weeks ago. The company's net loss for the quarter was $385 million, or 12 cents a share, in line with analysts' expectations. During the year-ago quarter, Nortel earned $347 million, a profit of 12 cents a share.

In March, Nortel said it expected revenues in the range of $6.1 billion to $6.2 billion and a loss from operations in the range of 10 to 12 cents a share for the quarter. Only a month earlier, Nortel had thought it was going to see $6.3 billion in revenues and a loss of 4 cents a share (see Nortel Warns of Shortfall, More Layoffs and Nortel's Nasty Surprise).

Nortel CEO John Roth again declined to give any guidance going forward for the quarter or the remainder of the year 2001.

Compared to its first quarter of 2000, Nortel's network infrastructure segment saw a 2 percent decrease in revenues, and its components business saw its revenues fall by 22 percent. Also comparing Q1 2001 to Q1 2000, Nortel said its revenues outside North America grew 38 percent, while its revenues for the U.S. and Canada dropped 23 percent. Nortel executives noted on the conference call that business in its Metro Optical group doubled from year-ago levels.

The company also said it would be laying off 5,000 more workers than previously announced, bringing its total job cuts to around 20,000 by the middle of this year. From its headcount of about 94,500 in December 2000, Nortel's most recent layoff total indicates that it will have cut some 21 percent of its staff in less than six months. CFO Frank Dunn said the cuts are expected to save a total of $2 billion in annualized costs.

A hint of optimism came when Roth said on the conference call that demand for long-haul optical capacity would pick up before the end of the year. He believes that the top carriers are currently operating at 70 percent to 80 percent capacity, and that they would start to max out that capacity in "three to four months."

"Some of these networks will be nearing capacity in the coming months," said Roth.

In after-hours trading on the Island ECN, Nortel's stock sat at $17.55, down slightly from Thursday's close of 17.80.

-- Phil Harvey, Senior Editor, and R. Scott Raynovich, Executive Editor, Light Reading http://www.lightreading.com