Nortel's stock fell nearly 15% on Friday after it revealed a wider loss for the second quarter, becoming the second vendor in a week to feel the impact of weaker demand for CDMA equipment.
The Canadian firm recorded a net loss of â‚¬72.5 (US$113 million), compared with a â‚¬23.7 million (US$37 million) deficit in Q2 last year.
Compared with the same period last year, orders were "primarily impacted by lower CDMA orders in North America and lower orders from the LG-Nortel joint venture," Nortel It announced on Friday.
"Nortel faces a challenging business environment with increasing risk due to general macro-economic weakness, continuing competitive pressures and potential of further reduced capex spending by key North American CDMA customers," the company said.
Revenue was down 5% year on year to â‚¬1.68 billion (US$2.62 billion). However, sales were up in all divisions except the carrier group, the largest segment by revenue, which saw a 2% decline to â‚¬667 million (US$1.04 billion). The services group saw a 9% rise to â‚¬344 million (US$536 million).
Despite the tough outlook, CEO Mike Zafirovski said Nortel was on track to meet guidance for the year.
Last week Alcatel-Lucent fired its chairman and CEO after a â‚¬1.1 billion ($1.7 billion) quarterly loss, primarily as a result of weaker CDMA demand in North America.