Nortel Networks Ltd. shares dropped on the news the company will not release its quarterly and yearly results as it promised.
The company said it has put off the release of its results to mid-November. The results are expected to cover financial statements for 2003 as well as the first and second quarters of 2004.
“This delay in our timeline for completing the restatement process was a very difficult decision,” said Bill Owens, president and chief executive officer of Nortel. “We have made great progress toward completion, have continued to devote massive resources to the restatement effort and are confident that we are very close to the end of this critical chapter.”
The company’s shares dropped 3.8 percent or 13 cents to $3.26.
Although it promised the results will be unveiled in November, it noted its “expectation as to timing of events is subject to change.”
Nortel said it expects its revenue to increase about 7 percent over previously announced figures for 2001, 1 percent in 2002 and 3 percent in 2003. However, it will report a 50-percent drop from its previously announced net earnings for 2003, which will affect the net earnings for 2001 and 2002. The company did not refer to the third quarter of 2004.
Nortel did not release specific dollar figures.
While the net earnings reduction will affect Nortel’s existing and discontinued operations, it will not impact its cash balance as at December 2003, said the company.
The company has been in the middle of financial crisis that has led to the removal of its former CEO and other principal officers and triggered not only internal audits, but also investigation by the Securities and Exchange Commission and a series of class-action lawsuits that have now been consolidated.
