Analysts had expected low single-digit growth this year, but CFO Peter Currie predicted that first-quarter revenue would be flat and the shares fell 2.15% to $26.45.
The standstill in Nortel’s growth comes after a year of modest expansion. In its fourth quarter, the loss was down from $2.2bn to $80m on revenue 9.7% higher at $3.3bn. For the year, it reported income of $80m, down from a loss of $2.6bn on revenue 8.6% higher at $11.4bn. The year-ago period was distorted by a $2.5bn payment to settle a class action lawsuit.
Nortel’s past also came back to haunt it last week when the SEC filed charges against former CFO and CEO Frank Dunn and three other finance executives, alleging that they engaged in a wide-ranging financial fraud to bridge gaps between its true performance, internal targets, and Wall Street expectations.
The company has only just completed the latest in a series of restatements of the accounts and now looks free of accounting problems as it contemplates life in a consolidated landscape of telecoms equipment vendors, with formidable competitors.
Performance was patchy. At its mobility and converged core networks division, sales grew only 4.2% to $5.9bn, and it was heavily reliant on its CDMA business, which increased sales 15% to $2.5bn.
The metro Ethernet networks side increased sales by 18.6% to $1.67bn, and enterprise solutions, helped by its joint venture with Korea’s LG Electronics Ltd, increased sales by 11.1% to $2.3bn. Nortel’s global services business only increased sales by 6.1% to $1.2bn.
