Nortel Networks posts loss of US$2.3-billion in final quarter of 2010

by Jeff Wiener on March 7, 2011

By The Canadian Press

TORONTO – Nortel Networks Corp., the former Canadian technology heavyweight that’s being dismantled under court supervision, reports it had a US$2.3-billion net loss in the fourth quarter.

It recorded just US$28 million of revenue during the three-month period — down nearly 96 per cent from US$641 million a year earlier and just a tiny fraction of the more than US$2 billion of sales it generated each quarter in its peak years.

Almost all of the fourth-quarter loss last year was attributed to non-cash charges related to the restructuring of Nortel’s U.S. subsidiaries.

Nortel says its U.S. subsidiaries, which typically accounted for about half of the company’s overall revenue when the company was operational, aren’t included in its financial results after Oct. 1.

As a result, company’s cash balance at the end of December dropped to US$807 billion — not counting US$3.2 billion in restricted cash, which is primarily proceeds from the sale of its business units.

By comparison, Nortel’s cash balance at the end of September had been US$1.7 billion, including $966 million related to the U.S. subsidiaries. Nortel’s restricted cash was also US$3.2 billion at the end of September.

For the full year, Nortel had US$620 million in revenue — compared with US$3.5 billion in 2009 — and reported a net loss of US$5.1 billion, compared with $500,000 of net income in 2009.

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