Nortel Growth Story Takes Unhappy Turn

It's getting harder for Nortel's (NT Quote) beleaguered fans to play the growth card.

The Brampton, Ontario, telecom-gear maker cut its projected annual growth rate in half Thursday, saying third-quarter sales would fall below second-quarter levels and lag behind the industrywide expansion clip. Nortel had been promising it would grow faster than the industry.

Nortel has been rocked this year by an accounting scandal, a deepening legal battle, costly financial reporting delays, a purge of presumably greedy executives and yet another agonizing round of employee cuts.

Yet through it all, some optimists have maintained that hidden by the swirl of setbacks was a core of good products keeping the company on track for steady sales growth. ...