Nortel shares sink after lackluster earnings
Telecom equipment maker posts a wider loss on restructuring costs and warns it faces challenges ahead amid concerns about the economy.
Shares of Nortel Networks sank as much as 17 percent on Friday after the company reported a wider second-quarter loss and warned that it faces challenges ahead.
The Canadian telecommunications equipment company posted a quarterly loss of $113 million, or 23 cents a share. That compares with a loss of $37 million, or 7 cents, a year ago. The results included $67 million in restructuring charges.
The company also warned that it faces increasing challenges amid concerns about the economy and lower spending by certain North American CDMA customers. But it asserted that revenue is expected to grow in the low single digits in 2008.
"In the second half, faced with a challenging business environment, we will continue our focus on execution and on delivering accelerated growth in key segments in order to achieve our financial objectives for the year," CEO Mike Zafirovski said in a statement.
Meanwhile, Nortel's competitors are facing hurdles of their own. Earlier this week,that CEO Patricia Russo and Chairman Serge Tchuruk are stepping down later this year as the company continues to struggle with losses and more competition from Asian suppliers.