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The aforementioned income figures are based on generally accepted accounting principles. On a pro forma basis, excluding various special charges and costs, the company reported a net loss of $420m (£271m), compared with a pro forma net loss a year earlier of $2.18bn (£1.4bn).
Earlier this month Nortel announced a broad reorganisation intended to help reduce costs and streamline its business as the slump in spending among services providers and big businesses continues.
Nortel expects to have a cash balance of $3bn by the end of 2002, said chief financial officer Doug Beatty.
Pressures on customers' capital spending are likely to continue well into 2003, Nortel officials said. The company will continue to cut costs and pursue its "top priority" of returning to profitability by the second quarter of 2003.
Gross margins in the quarter just ended increased to 38% despite a 15% sequential decline in revenue, he said, a reflection in part of Nortel's success in cutting costs and streamlining its business.
The profitability plan also calls for Nortel to reduce its worldwide headcount to 35,000. At the end of the third quarter it was below 39,000.
Nortel expects to see a sequential improvement in its pro forma bottom-line results in the fourth quarter of 2002.
Nortel president and chief executive officer Frank Dunn said more attention should be paid to a "transformation" of networks to make them a more appropriate size and type for business conditions in the years ahead.
This could be achieved in part through the development of IP-based networks for wireless and wireline communications, and by helping enterprises and service providers to build secure, converged networks that support the delivery of data, video and voice traffic, he said.
Compared with the third quarter of 2001, revenue from Nortel's wireless networks segment decreased 30%, revenue from its enterprise networks unit fell 10%, revenue from its wireline networks segment declined 49%, and revenue from its optical networks segment declined 47%, "representing substantial decreases across all major regions", the company said.