Nortel Posts Larger 1Q Loss, Sales Fall

TORONTO (AP) — Nortel Networks Corp. posted a $507 million first-quarter loss Monday as phone companies and other telecom equipment buyers choked off spending during the deep economic downturn.

The Toronto-based company, which has been operating under bankruptcy protection since mid-January, reported a 37 percent decline in revenue and shrinking margins leading to the loss for the three months ended March 31 equal to $1.02 per share.

It lost $138 million, or 28 cents per share, in the same period a year ago.

Nortel, which reports its results in U.S. currency, said its revenue fell to $1.73 billion from $2.76 billion a year ago.

The decline, largely due to a weak economy and Nortel's financial problems, was worsened by the impact of currency fluctuations, which reduced overall revenue by $225 million, representing 8 percent of the decline.

Sales by Nortel's biggest revenue contributor, carrier networks, fell 32 percent to $737 million.

Revenue from the enterprise solutions segment declined 41 percent to $395 million, metro ethernet networks dropped 10 percent to $360 million and the company's joint venture with LG fell by two-thirds to $188 million as a major contract came to an end and didn't contribute.