Nortel Networks reported a first-quarter profit after a string of losses, showing results of a draconian cost-cutting programme that has included halving its workforce.
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Nortel, one of the world's largest manufacturers of telecommunications equipment, posted net income in the first quarter ending 31 March of $54m (£34m) compared with a net loss of $841m in the same period last year.
The company's results were boosted by net earnings of $190m (£120m) from the sale of Arris Group and the settlement of certain trade and customer finance receivables, it said.
But first-quarter revenue at Nortel fell to $2.4bn (£1.5bn) from $2.9bn the year before, reflecting ongoing weak demand for its switches and routers.
Nortel, like its rivals Lucent Technologies, Alcatel and Siemens, has been hit hard by a dramatic drop in spending by network operators that amassed too much network capacity during the internet boom and a mountain of debt from costly acquisitions and wireless licences.
Nortel expects the overall telecoms equipment market to be down modestly in 2003. Given the ongoing economic downturn and political uncertainty in some regions of the world, customers will continue to spend cautiously, it said. As a result, Nortel expects capital spending levels in the second quarter of 2003 to be similar to the first quarter of 2003.