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The Canadian telecoms equipment manufacturer, which recently shed 265 jobs at its Galway and Belfast facilities, said that it had a net loss for the quarter ended September 2001, of USD3.5 billion or USD1.08 per share, compared to a loss of USD586 million, or USD0.17 per share, for the same period last year.
Revenues during Q3 2001, fell to USD3.7 billion from USD6.7 billion in Q3 2001. Nortel had previously said it expected revenues for the third quarter to hit USD4 billion, but revised that estimate earlier this month downward to USD3.5 billion.
Nortel said that sales were down in all business areas across nearly all the company's markets. Although its wireless Internet solutions grew "substantially" in Canada and "slightly" in Asia, these gains were offset by a considerable decline in Latin America, a slight decline in the US and a decline in Europe. The same pattern also occurred for optical intercity revenues and local Internet revenues, which showed minimal growth in Asia only. Overall, revenues for the US were down 54 percent on the same period in 2001, down 53 percent in Canada and 30 percent outside North America.
"Revenues for the quarter reflected the challenges presented as the telecom industry adjusted to new levels of spending," said John Roth, president and chief executive officer, Nortel Networks. "Our bottom line results reflected the impact of actions we have taken to adjust to the new business levels."
Roth added that the company is in the final stage of implementing a cost structure that will see break-even occur even when its quarterly revenues are well below USD4 billion. This structure is expected to be in place in Q1 2002.
A key part of this new structure has been a massive cost-cutting exercise that has seen Nortel announce large-scale redundancies in recent months. The company has said that it planned to reduce its workforce to 45,000 from 100,000. Nortel also intends to divest itself of non-core businesses, which will reduce its workforce by a further 10,000.
Its latest round of job cuts, which were announced earlier this week, saw it shed 20,000 workers from its payroll. This included nearly 270 jobs at its Irish operations. The company laid-off 150 jobs at its Galway plant and 115 jobs in Belfast.
At the start of the year Nortel employed around 2,000 people in Ireland. Following the cuts that figure stands at 1,150. However, Nortel said that it would expand its R&D facility in Galway and increase the number of people in that unit to 240.
Nortel said that although it is beginning to see early indications that capital spending by service providers is approaching sustainable levels, future revenues remained difficult to predict. It added that this, taken with the uncertainly regarding the impact of the events of 11 September on economies and businesses around the world, meant it would not be providing guidance for the fourth quarter or the full year 2002 at this time.
Nortel can be found at http://www.nortelnetworks.com.
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