Nortel to change financial results again over accounting error

Nortel Networks, which has restated results three times since 2003 and faced federal scrutiny and class-action lawsuits over its accounting scandals, needs to restate past results after finding problems with how it accounted for pensions and retirement plans, an Associated Press report said.

The Associated Press report said the changes add about $129 million in losses to 2004 to 2005 reports, while improving 2006 earnings by $15 million.

The firm's CFO Peter Currie told analysts in a conference call that the restatement involves calculation errors related to the recognition of revenue and pension and post-retirement plans, the report said.

The errors cover 2004, 2005 and the first nine months of 2006, as well as 'third-party actuarial calculation errors which originated prior to 2000.,' the report added.

The executive, quoted in the report, added that, individually, the corrections are immaterial items and that unaudited fourth-quarter 2006 results announced February 7 are not affected.

In addition, 2005 and 2004 financial results will reflect reductions in revenue of $28 million and $33 million and increases in net loss of about $87 million and $42 million, respectively, the report said.

As for results before 2004, Nortel expects revenue cuts of about $27 million and a $5-million reduction in total net earnings, the report further said.

 

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