Nortel (NT) found more problems with its accounting Thursday.
The Toronto-based telecom gearmaker, which has already restated results three times in the last four years, said it will have to restate again. Nortel cited "third party actuarial calculation errors originating prior to 2000 on liabilities for employee benefit plans and timing errors on the recognition of revenue."
Nortel and its subsidiaries will restate their financial results for 2004, 2005 and the first nine months of 2006, and will make adjustments to periods prior to 2004. The company said the move will add $119 million to its losses and reduce reported revenue by $64 million.
Nortel will delay filing its 2006 annual report but expects to do so by March 31. The company will have to seek a waiver for its support facility through Export Development Canada.
Thursday's news comes after an eventful February. The company announced the loss of a top exec, plans to cut 2,900 jobs and revenue that was stronger than Wall Street had expected.
"During 2006, we have implemented significant remedial measures and other actions to address our internal control weaknesses. This has resulted in a substantial reduction of control weaknesses as at year end and represents a major milestone in our journey toward consistent, reliable and timely financial reporting," said Peter Currie, Nortel executive vice president and CFO, who recently announced plans to quit for the third time. "We will conclude the restatement and complete our regulatory filings within the timely filer period."
Last March, after three years of bookkeeping cleanup efforts that led to two restatements, Nortel discovered yet another accounting error and said it would shave $866 million from previously reported sales to fix its missteps. The accounting blunder took Nortel's total restatements to $4 billion over a 10-year period
"Nortel made tremendous progress advancing its business transformation plan in 2006, and today's announcement does not slow our progress or divert our focus," said Mike Zafirovski, Nortel president and CEO. "Our expected fourth quarter results show measurable operating and financial improvements. We are a stronger, more competitive company today and we will continue to drive our progress into 2007 and beyond."