July 13, 2004
(Computerworld)
Nortel Networks Ltd. in Brampton, Ontario, today said its net earnings in 2003 will be restated downward by 50% and net earnings based on continuing operations last year will be eliminated with the change.
The announcement came in a biweekly status update required under guidelines by the Ontario Securities Commission as Nortel continues to investigate financial irregularities over the past three years.
The networking equipment maker said the impact on net earnings for 2003 means that there actually was a net loss for the first half of 2003, and a reduction in net earnings for the second half of the year. The adjustments to the 2003 earnings will be shifted to 2002, reducing the net losses Nortel reported in 2002.
Nortel also said it expects to announce preliminary unaudited results for the first two quarters of 2004 by mid-August.
The company has been making regular reports on its prior financial performance, noting that revenue and sometimes earnings should have been deferred or recognized earlier due to what it calls "timing issues" on when they were reported.
The restatements so far don't appear to have had a major impact on Nortel revenue.
"I am ... pleased with Nortel Networks' market momentum and continue to expect our revenues in 2004 to grow faster than the market, which we now expect will grow in the low midsingle digits," Nortel CEO Bill Owens said in a statement. "The current year has been an extremely challenging one for Nortel Networks in light of our various announcements.
"That being said, we are committed to placing Nortel Networks in a position to success as we move through 2004 to 2005 and beyond."