Nortel (NT) earned another reprieve Monday, this time from the listing authorities.
New York Stock Exchange
is giving Nortel three more months to file its 2003 annual report. If Nortel misses the March 31 deadline, the NYSE could suspend the company's Big Board listing.
Investors had been holding their breath in the wake of a November comment indicating the NYSE would review Nortel's listing status if the company failed to file the 2003 annual report by year-end. At the time, though, Nortel indicated it had received
"verbal" assurances from the NYSE and the Toronto Stock Exchange about the continued listing in the company's shares.
The Brampton, Ontario, telecom-gear maker has fallen behind in its federal filings as it struggles to come to terms with a multibillion-dollar accounting scandal. The company has already received several waivers from its lenders for repeated delays in its formal restatement of numbers from the last four years.
Monday's development comes as Nortel has begun sounding more confident about its ability to become current on its filings. The company reiterated last month's comment that it expects to file all its restated financial reports on Jan. 10.
Nortel's ongoing audit has revealed $3.2 billion in bogus sales dating back to the Internet construction boom in 1999 and 2000. The company first tumbled into this accounting scandal in May after internal audits showed that 2003 earnings were overstated by $300 million. Those would-be profits were central to a round of executive bonuses handed out in 2003.
The book-cooking discovery led to the removal of 10 executives.
With the company immersed in accounting issues, investors have had a limited view of the pace of Nortel's business. Last month, the company posted a third-quarter adjusted net loss of 5 cents a share on $2.27 billion in sales. While those results fell below analysts' estimates, Nortel's guidance for the quarter ended last week was solid. The company expects sales to grow about 25% sequentially to $2.8 billion.
Still, whether the problem is the accounting distraction or diminished sales leverage, Nortel has been on the sidelines in some recent contract wins. In November, for example, Nortel
lost out to rivals
in the estimated $4 billion wireless data upgrade job announced by
Nortel shares rose 3 cents to $3.50 in midday trading Monday.