Nortel Networks posted a wider net loss for the first quarter and a 37 percent drop in revenue. The company, which entered bankruptcy protection in January, said it is loosening oversight of some of its business units as it decides which units it might sell.
The company's net loss of $507 million was far greater than the net loss of $138 million it posted in the year-ago quarter. Revenues were down across all of Nortel's businesses, coming in at a total of $1.73 billion--a full billion dollars less than the $2.76 billion Nortel scored in the first quarter of 2008. Nortel said that excluding the negative impact of foreign exchange fluctuations would result in a decline in revenue of 29 percent.
Nortel also said it will "decentralize" its Carrier Sales and Global Operations functions over the coming weeks, which it said will help it achieve "vertically integrated and fully independent business units." Speculation has swirled around the company for months that it will sell off its main businesses rather than emerge from bankruptcy protection as a single viable entity. The company was noncommittal about its plans regarding the sale of some of its operations, but Nortel CEO Mike Zafirovski said in a statement that "work is well underway to evaluate the ultimate path forward for our businesses."
"Discussions are taking place with various external parties, however, decisions have not been taken and we continue to evaluate our restructuring alternatives," he said. "To provide maximum flexibility, we are also taking the appropriate steps to complete the move to standalone businesses."
According to various reports, Nortel wants to sell its 50-percent stake in the networking joint venture it has with LG Electronics, and Nokia Siemens Networks has offered to buy large chunks of Nortel's businesses, including most of its carrier networks unit and a research unit focused on LTE. Nortel was recently granted an extension on its bankruptcy protection until July 30.
For more:
- see this release
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