The roller coaster ride, otherwise known as Nortel Networks Ltd. (NYSE/Toronto: NT), continues to give investors more chills than thrills.

With the world patiently awaiting Nortel's oft-delayed accounting restatements, the company dropped another little bomb this morning, saying its revenues for the third quarter of 2004 will be lower than previously expected.

The news, provided in the company's biweekly update to the Ontario Securities Commission, also contained more gloomy news that the company now expects "mid-single digit" growth for all of 2004. Officials also state that growth may now trail the market, a significant change from earlier this year, when the company said it expected to outpace market growth.

It now seems likely that Nortel's new post-accounting-mess financial picture may not come into full focus until the end of the year. The overhaul of its books and a complete earnings restatement, now expected in October, have been delayed several times and are said to involve hundreds of accountants.

In reading the biweekly updates, Nortel watchers now know to skip the second paragraph, which includes the boilerplate: "There have been no material developments in the matters reported in their status updates of June 2, 2004, June 29, 2004, July 13, 2004, July 27, 2004, August 10, 2004, August 19, 2004 and September 2, 2004 with the exception of the matters described below." (Prior updates can be found here: Nortel Updates on Restatements, Nortel Updates, Little To Say, Nortel Provides Financial Update, Nortel Provides Status Update , Nortel Provides Status Update, Nortel Provides Q1, Q2 Estimates, and Nortel Delays Filing.)

The more material part of today's update said that third quarter revenues will be below the company's most recent estimates -- Nortel had been cautiously guiding investors that it could maintain about $2.5 billion in revenue per quarter, with the caveat that it wouldn't really know until its restatements are done.

On a full year basis, Nortel sees "mid-single digit" revenue growth in 2004. But more ominously, it now states that "communications equipment market will grow faster than that," implying that Nortel's growth has slowed and that it may lose market share.

That is a significant change from the beginning of the year, when Nortel officials said they would outpace growth in the market at large. In the July 13 update, Nortel president and CEO Bill Owens says, "I am also pleased with Nortel Networks market momentum and continue to expect our revenues in 2004 to grow faster than the market (which we now expect will grow in the low to mid single digits)."

“As we work through this challenging transition period, completing our restatement activity and implementing the new strategic plan for the Company, I am confident that Nortel Networks will be positioned to compete strongly in all of our markets with the right products and services as we move into 2005,” says Owens in the update.

In legal matters, Nortel says that 27 class action lawsuits brought against the company have been consolidated in a suit filed on Sept. 10, 2004. The consolidated class action complaint was filed in Southern District of New York and alleges that defendants (Nortel Networks, certain current directors, and certain former officers) violated U.S. securities laws, including making materially false and misleading statements. In addition, Nortel continues to be under investigation by the Ontario Securities Commission, the Securities and Exchange Commission (SEC), and the U.S. federal government.

For more on the history of Nortel's volatile 2004, see:

— R. Scott Raynovich, US Editor, Light Reading