Nortel to Report Earnings

The company is named in another lawsuit as well.
By Scott Moritz ,

Tardy filer Nortel (NT) says it will report earnings for the third quarter ended in September after the close of the market today.

The telecom-equipment maker says it was also hit with another shareholder lawsuit related to its 2003

"bonusgate" scandal.

A group of Canadian investors filed a shareholder lawsuit on March 9 seeking $3.3 billion and charging that company executives padded profits to cash in on millions of dollars in bonuses.

Last month, Nortel said it was suing its former CEO Frank Dunn and two other former executives who pocketed more than $10.5 million in bonuses triggered by profits that were later found to be bogus.

A group of U.S. shareholders also filed a lawsuit charging several former and current directors and executives with a breach of fiduciary duty and potentially unlawful conduct between 2000 and 2003.

Nortel says it has fired 10 executives who had a role in the accounting scandal, and in an effort to distance itself from its troubled history, the company plans to overhaul its board and replace five directors.

Earlier this month, Nortel hired retired

Cisco

(CSCO) - Get Report

executive Gary Daichendt as its president and No. 2 executive under CEO Bill Owens.

Nortel tumbled into financial disarray after audits revealed that 2003 earnings were

exaggerated by some $300 million; this eliminated the surprise profit central to the executives bonuses. In May 2003

TheStreet.com

reported that the

numbers didn't add up nearly a year before the executives were fired, and several federal agencies began investigations into the company's accounting practices.

Nortel is concluding a lengthy book-cleaning effort and has subsequently missed several financial filing deadlines.

Last month, the Brampton, Ont., gearmaker reported its financial results for the first half of 2004.

In the second quarter, Nortel posted net income of $16 million, or less than a penny a share, on $2.6 billion in revenue. Those figures compare with a year-earlier net loss of $101 million, or 2 cents a share, on sales of $2.3 billion.

Nortel shares rose 5 cents, or 2%, to $2.93 in early trading Friday.

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