Nortel Warns of Shortfall, More Layoffs
After the markets closed today, Nortel Networks Corp. (NYSE/Toronto: NT) issued a gloomy press release stating that its quarterly revenues will fall short of previous guidance and that the company will pursue further cost-cutting measures, including as many as 15,000 layoffs (see Nortel Lowers Q1 Outlook).
The company now expects revenues in the range of US$6.1 billion to $6.2 billion and a loss per share from operations in the range of $0.10 to $0.12 for the quarter. This is below the company's previous estimates, provided on February 15, 2001, of $6.3 billion of revenue and loss per share from operations of $0.04.
In after-hours trading on the Island ECN, Nortel shares were trading at $15, down 1.76 (11%) from Tuesday's closing price of 16.76. During regular hours trading on Tuesday, shares had fallen 0.16 (0.95%).
CEO John Roth said the company could give no clear indication of when things would get better.
"Given the poor visibility into the duration and breadth of the economic downturn and its impact on the overall market growth in 2001, it is not possible to provide meaningful guidance for the company's financial performance for the full year 2001," Roth said in the statement.
By the middle of 2001, the company said it expects to have 79,500 employees. That's 15,000 fewer than its Dec. 31, 2000 headcount of about 94,500 employees.
"We continue to align our cost structure and industry-leading product portfolio with our customers' priorities and plans," Roth said.
-- R. Scott Raynovich, executive editor,Light Reading http://www.lightreading.com