Nortel lowers expectations

Nortel Networks said Thursday it expects third-quarter revenue to fall short of the $2.6 billion sales it posted in the second quarter of 2004. Analysts had expected third-quarter sales of $2.58 billion, according to a survey by Thomson Financial. Nortel had previously indicated that its revenue would grow faster than overall communications equipment market, but the company now says it will grow slower than the overall market. Yearly growth for 2004 is expected to be in the single digits, the company said.

Last month, Nortel announced a 10 percent work force reduction, after it posted weaker-than-expected results for early 2004. Nortel's financial accounting has come under fire after the company said it would have to restate earnings as far back as 2000. The company has fired seven financial managers in addition to its chief executive, chief financial officer and comptroller. It now faces shareholder lawsuits and criminal investigations in Canada and the United States.