Nortel holds ground after S&P cuts outlook
Nortel Networks' shares stay flat after Standard & Poor's lowers its outlook on the network-equipment maker from a "stable" rating to "negative."
While the debt-rating agency did reaffirm Nortel's single-A rating for its long-term debt, analyst John Tysall said weakened demand for telecommunications equipment is "more severe than expected, resulting in slower overall market growth and demand for Nortel's products."
Lending institutions around the world have adopted more stringent requirements for companies looking to raise additional capital as both the U.S. and global economies continue to sputter. Huge quarterly losses and inventory write-offs combined with concerns about how companies manage their debts have investors running for cover.
Earlier this quarter, it issued another profit warning, telling shareholders to expect a loss between 10 cents and 12 cents a share on sales of $6.1 billion to $6.2 billion.