TORONTO – A 5% drop in revenue last year helped push Nortel Networks’ net loss to $5.8 billion for 2008.
Nortel, who filed for creditor protection in January, saw fourth quarter revenue drop across all of its business units – an 8% decrease in the carrier networks unit, 30% in the enterprise solutions unit, 12% in global services, and 14% in the metro ethernet networks group.
Revenues for the fiscal year ended December 31, 2008 were $10.42 billion compared to $10.95 billion for 2007. The net loss included a non-cash charge of $3 million to increase the valuation allowance against deferred tax assets, and a goodwill write down of $2.4 million, said the press release announcing the results.
The ailing telecom equipment maker reported a 15% drop in revenue in its fourth quarter to $2.72 billion, which resulted in a $2.1 million quarterly net loss. This included a non-cash write-down of goodwill of $1.2 million and a non-cash charge of $951 million to increase the valuation allowance against deferred tax assets.
Revenue was $2.72 billion for the fourth quarter of 2008, compared to $3.20 billion for the fourth quarter of 2007 and $2.32 billion for the third quarter of 2008.
"The fourth quarter revenues decreased 15% as the market continued to deteriorate and customers either reduced or deferred spending,” said president and CEO Mike Zafirovski, in the release. "As Nortel continues to work through a complex global restructuring of its business, our focus remains firmly on maintaining high customer service levels for on time delivery, network stability and responsiveness.”
The company also added to the duties of CFO Pavi Binning, appointing him Chief Restructuring Officer of the company and Nortel Networks Limited, reporting to Zafirovski.
