Nortel Networks (NYSE: NT) fell 38 U.S. cents to $17.42 in morning trading Friday, after the telecom companyreported a quarterly loss and said it will lay off more workers.
The Toronto, Canada-based communications company said revenue for the firstquarter ended March 31st slipped to US$6.18 billion, from $6.32 billion inthe same period last year.
Nortel posted a net loss of $2.58 billion,or 82 cents per share, compared with a loss of $730 million, or 26 cents per share, ayear earlier. The results were in line with already reduced expectations.
President and chief executive officer John Roth blamed the revenue drop onlower capital spending, as Nortel customers felt the effects of a weakeningU.S. economy.
“The lack of available funding from the capital markets, highdebt levels at many service providers and the compounding effect of the U.S.economic downturn and its impact on other regions will continue to constraincapital spending by service providers,” Roth said.
“We only expect a meaningful rebound in capital spending following a periodof industry rationalization and an improved economic environment,” Roth added.
Roth declined to predict results for the rest of the year.
Nortel also said it would cut more jobs, aiming to reduce headcount by20,000 between the end of last year and the middle of this year. The job cuts are 5,000 more than previously projected.
The company has announced two rounds oflayoffs so far this year.
“We continue to sharpen our focus and activities around the key markets oftomorrow, specifically the lowest cost intelligent optical networks, core IPnetworking and wireless Internet solutions for service providers andenterprises,” said Roth.
“We are confident that these efforts will enable usto build on our strong customer relationships and market position and allow us to extend our global leadership position.”