Nortel Networks has further lowered its revenue expectations for
the third quarter, saying it expects to take in approximately 15%
than in the previous quarter.
The company posted revenue of $2.77bn (£1.78bn) in the second
quarter of this year. Third-quarter revenue in 2001 was $6.73bn
(£4.32bn), but the networking and telecommunications companies that
make up Nortel's major customers are not spending this year,
especially US service providers and wireless network providers in
Asia.
Nortel posted revenue of $7.31bn (£4.69bn) in the third quarter of
2000, but has been cutting costs and jobs and has seen revenue
steadily decline amid a collapse of the telecommunications
industry. Lower revenue is also the result in part of reduced
ownership in joint ventures and efforts to divest certain
businesses.
Nortel initially predicted flat third-quarter revenue growth when
it released its second-quarter results in July, but revised those
estimates down 10% in August.
The company will consider a reverse stock split, consolidating its
existing shares. It will present a plan to its shareholders at its
annual meeting in the second quarter of 2003 to bring the stock
back to a range of $10 to $20, it said.
The move would allow Nortel to avoid having its stock delisted by
the New York Stock Exchange. Stocks that trade below $1 are subject
to delisting by either the NYSE or the Nasdaq stock markets.
Nortel's stock (NT) closed at 64 cents on Wednesday, and was down
10 cents in early morning trading yesterday.