Nortel Issues Q3 Revenue Warning

Nortel Networks Corp., one of the top global makers of telecommunications equipment in North America, said Thursday it expects third-quarter revenue to fall short of the $2.6 billion sales the company posted in the second quarter of 2004.

Shares of the Ontario-based company closed Thursday at $3.80 on the New York Stock Exchange, but were down 9.2 percent, or 35 cents, at $3.45 in pre-market activity.

On a full-year basis, Nortel now forecasts that 2004 revenue percentage growth over 2003 will be in the mid-single digits and said the overall communications equipment market will grow faster than that.

Last month the company announced it would shed about 10 percent of its workforce, or 3,500 jobs, after posting weaker-than-expected results for early 2004. Nortel, which has fired seven financial managers in addition to its chief executive, chief financial officer and comptroller, is also facing shareholder lawsuits and a Canadian police criminal investigation after the company announced it would restate financial results for 2000, 2001, 2002 and the first two quarters of 2003, bringing accounting irregularities to light.