Nortel cuts outlook, shares plunge

Nortel Networks stock tumbled after it slashed its business outlook and said it plans another round of cutbacks in the face of a struggling economy, an Associated Press report said.

North America's biggest maker of telephone equipment saw its shares fall to C$3.12 (€2.02, US$2.9) on the Toronto Stock Exchange after plunging as low as C$3 (€1.95, US$2.8), down from a 52-week high of C$18.96 (€13.22,US$17.7).

Management at the Toronto-headquartered company now expects revenue this year to be lower than last year's by between 2% and 4%, the Associated Press report also said.

'It is clear that the business environment in which we operate requires additional immediate and decisive actions,' CEO Mike Zafirovski said in a statement.

Zafirovski said factors such as competitive pressures and the potential for further reduced spending are ravaging the company.

Nortel also said revenue in the current quarter is being hampered by foreign exchange fluctuations and some product-delivery delays into the fourth quarter.

Nortel, which keeps its accounts in US dollars, now projects revenue in the current third quarter at €1.6 billion (US$2.3 billion), down 14% from a year ago.