Nortel Misses Halloween Target

It's a case of trick, not treat. Despite "nearing completion," Nortel Networks Ltd. (NYSE/Toronto: NT) will not file its financial restatements for all 2003 periods and the first two quarters of 2004 by the end of October, as previously announced (see Nortel Delays Financial Statements and Nortel Restates Delay of Restatement ).

Instead, the vendor now says it expects to file those numbers by mid-November. In addition, Nortel now also expects to miss its deadline for filing its third-quarter numbers and has notified the Securities and Exchange Commission (SEC). It expects to file "limited preliminary unaudited financial results" for the third quarter by the end of November, and a full financial report for the quarter by mid-December.

All these timings, though, are still "subject to change."

The news sent Nortel's share price down by 10 cents, nearly 3 percent, to $3.29.

In a prepared statement, Nortel CEO Bill Owens said the company's "first accountability is to unquestionable quality of this restatement for our shareholders, customers and employees."

He added: "I was not satisfied given the enormous details and complexity involved that we would be able to meet our October deadline. Although this delay is disappointing, we have made great progress toward completion... Seeing that closure is close at hand leads us to be confident about moving forward with our business."

He did not indicate whether he expects shareholders to roll his house with toilet paper on the evening of October 31.

Also noteworthy is that Nortel didn't open its latest status update with the phrase "there are no material developments in the matters reported in [the previous] status updates... with the exception of the matters described below." (See Nortel Provides Status Update and Nortel Provides Status Update.) The phrase -- the PR equivalent of a giggling, snorting poker player -- did not appear anywhere in the release, perhaps a signal that Nortel is becoming more savvy in its messaging.

— Ray Le Maistre, International News Editor, Light Reading

dodo 12/5/2012 | 1:08:46 AM
re: Nortel Misses Halloween Target REVENUE ADJUSTMENTS

"In Wednesday's update, Nortel did tweak by how much the earnings adjustment will impact each half of the 2003 fiscal year. The company also said that it will end up with some upward restatements to its revenues for 2001 to 2003 due to timing issues. In other words, revenues previously reported for one quarter have been shifted to another.

Those revenue adjustments are expected to result in an increase of seven per cent to previously stated revenues for 2001, one per cent in 2002 and three per cent in 2003."

dodo 12/5/2012 | 1:08:46 AM
re: Nortel Misses Halloween Target "But the story gets worse. As technology executives began leaving their offices in handcuffs after auditors found creative accounting in the financial departments or outright theft at some high-profile companies, it seemed analysts had no idea there was serious book-cooking going on in boardrooms across North America"

exnortel2 12/5/2012 | 1:08:43 AM
re: Nortel Misses Halloween Target Any one still in the telecomm busniess, or better yet still with NT, cares to drop a few words about the future of the company and the business in general ? It does not look good that a company keeps on breaking promises ? Is NT stock still worth holding ? Thanks.
straightup 12/5/2012 | 1:08:42 AM
re: Nortel Misses Halloween Target What I find astounding is the total silence about the auditors Deloitte and Touche? I know management are the guilty ones ... but hey, are the auditors not hired to help expose games with reserves, revenue recognition, etc.? If we want to improve the integrity of capital markets, I think the accounting profession needs to take any accounting of themselves.
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