Nortel now expects to post a first-quarter loss of 14 cents a share, wider than the 13 cent loss analysts forecast, according to earnings tracker First Call. The revised estimate includes a $200 million pre-tax writeoff of excess and obsolete inventory.
The company also expects to report quarterly sales of $2.9 billion, below the firm's previous expectations. CEO Frank Dunn said customers' "limited capital expenditures" caused sales to fall 16 percent sequentially in the first quarter, worse than previous guidance for a 10 percent drop.
Including acquisition-related expenses and severance costs, Nortel expects a net first-quarter loss of 26 cents a share.
Nortel (NT: up $0.07 to $3.65, Research, Estimates) shares were marginally higher in early trading Tuesday.
Separately, Nortel said it intends to draw fully on its $1.8 billion bank facility and plans to exercise its one-year term loan option to improve liquidity.
"The company does not have an immediate need for these funds," Dunn said. "However, by taking this action we have taken advantage of the favorable terms in our current facilities rather than seeing this source of liquidity eliminated."
The company also expects to report quarterly sales of $2.9 billion, below the firm's previous expectations. CEO Frank Dunn said customers' "limited capital expenditures" caused sales to fall 16 percent sequentially in the first quarter, worse than previous guidance for a 10 percent drop.
Including acquisition-related expenses and severance costs, Nortel expects a net first-quarter loss of 26 cents a share.
Nortel (NT: up $0.07 to $3.65, Research, Estimates) shares were marginally higher in early trading Tuesday.
Separately, Nortel said it intends to draw fully on its $1.8 billion bank facility and plans to exercise its one-year term loan option to improve liquidity.
"The company does not have an immediate need for these funds," Dunn said. "However, by taking this action we have taken advantage of the favorable terms in our current facilities rather than seeing this source of liquidity eliminated."
