Nortel losses widen as carrier spending falls

Nortel's first result since entering bankruptcy protection reveals a widening loss as sales fell across the board in the fourth quarter.

The Canadian vendor yesterday reported a net loss $2.14 billion for the quarter, down from $844 million a year earlier.

Revenue was down 15% to $2.72 billion, with enterprise and metro Ethernet sales off 30% and 14% respectively. Sales to carriers - its biggest customers - were down 8%, but up 50% over the third quarter.

Sales over the full year fell 4.8% to $10.42 billion. The net loss of $5.8 billion included a $3.02 billion deferred tax adjustment, a $2.38 billion writedown in goodwill and tax recovery of $56 million.

The company applied for bankruptcy protection in North America on January 14.

CEO Mike Zafirovski said operating expenses in Q4 were down 30% and company was working on a "comprehensive plan to restructure Nortel into a more focused, leaner and more competitive company."

The company appointed CFO Pavi Binning as chief restructuring officer. It said it would not provide guidance for the year.

It said the carrier networks business had been impacted by lower customer spending and currency movements, but had been boosted by the recognition of previously deferred revenues.