Nortel Files 2003 Financials
But of course, there's still the matter of 2004's numbers, which have still to be filed.
News that Nortel had finally stuck to a self-imposed filing deadline sent the vendor's share price up by 15 cents, more than 4 percent, to $3.49 in pre-market trading this morning (see Jan 10 Is Nortel's F-Day).
The 2003 audited numbers as filed with the Securities and Exchange Commission (SEC) are slightly different from the projections provided previously. Total revenues for 2003 are $10.19 billion, compared with the $10.27 billion estimate, while the earnings per share (EPS) for 2003 are $0.10, compared with the previous estimate of $0.12 (see Nortel's Numbers Disappoint).
Available cash at the end of 2003 was $4 billion, as previously estimated.
Nortel CEO Bill Owens thanked his staff, and called the restatement "a monumental task, both complex and demanding." (See Nortel: Financial Stuff Really Complex.) In a company statement he added: "I also want to thank our customers for their consistent support that has allowed us to maintain our business and strong financial position during this time and continue our expansion in critical markets," such as China, India, and the security and Federal sectors.
Some eyebrows might be raised, though, at Owens's claim that Nortel "enters 2005 in a strong position," as many analysts and industry observers believe the company has been damaged by the financial scandal of the past year.
Meanwhile, as Nortel is attempting to close the books on its accounting scandals, many investors appear to remain frustrated that they can't get any forward vision on the company's numbers for 2005. And that's kept the stock stuck in the mud.
In a conference call this morning, Owens wouldn't provide any details of the company's 2005 business plan, but said "2005 revenues will be higher than in 2004." He added that Nortel was working hard to keep costs down and achieve the target gross margins of 40 percent.
Owens said the coming months would see announcements on particular ongoing initiatives. It's a changing market, with "VOIP and converged network" strategies of particular importance. "We're well positioned in next-generation networks. It's going to be good business for us."
Also mentioned in today's release is action regarding the retrieval of executive bonuses that were paid based on now discredited figures (see Nortel Silent on Baffling Bonuses). Nortel says 12 senior executives have agreed to pay back their 2003 "Return to Profitability" bonuses voluntarily over a three-year period. Nortel says it will recoup about $8.6 million.
It also absolves those executives of any blame. "While none of these executives was found to have been directly involved in the inappropriate provisioning conduct, these members of the core executive team share the Board's deep disappointment over the circumstances that led to the restatement."
Owens is quoted in the firms' release as saying, "These voluntary actions reflect the strength of character and quality of leadership of Nortel's core executive team. These actions are a tangible demonstration of senior management's commitment to Nortel."
However, Nortel hasn't given an update on whether it has managed to retrieve bonus moneys paid to former executives such as Frank Dunn, who was sacked as CEO last year (see Nortel Dismisses Dunn).
In the conference call, Owens reiterated that Nortel will "take steps to retrieve bonuses awarded to those engaged in misconduct," and that "appropriate legal action" would be taken if necessary, though no proceedings had yet begun.
Next up are 2004's financials. Nortel expects to release unaudited numbers for the first two quarters of 2004 before the end of January, with third-quarter unaudited financials following soon after. The company is also "working hard" to close the books for the fourth quarter and the full year 2004, but Owens couldn't say when the 10K report for last year will be filed with the SEC.
— Ray Le Maistre, International News Editor, Light Reading