Citing the “volume and complexity” of the task, Nortel has
delayed by one month its financial restatements until the end of October.
The Brampton, Ontario, company will file with Canadian and U.S. regulators
for an extension of the filing deadline.
Providing revised figures for 2003 and the first half of 2004 could help
restore the confidence of investors and customers after an accounting
scandal that forced out
the company’s top executive and seven senior managers.
“Notwithstanding the delay … we have made substantial progress to date
and continue to dedicate all necessary resources and work closely with our
external auditors to complete the financial statements as soon as possible
in October,” Bill Owens, Nortel’s new president and CEO, said in a
statement.
The realization that the restatements wouldn’t be ready must have come
mid-week. As late as Tuesday, Owens, at a meeting
with reporters at Nortel’s Boston-area R&D facility, was using the Sept. 30
date for the updates.
Owens has acknowledged that the accounting debacle has been painful for the
company. In addition to devoting staff to dissecting the books, he’s added
the new executive position of vice president of ethics and compliance.
At the same time, Owens is trying to address a market that is recovering but
changing rapidly.
Now, in addition to competition from its traditional rivals — Cisco , Lucent
, Alcatel
— Chinese
rivals are improving the quality of their products and forcing prices and
profit margins down. Besides focusing on R&D, Nortel is talking with Asian
manufacturers and may pursue a partnership.
Shares of Nortel were off 6 cents, or less than 2 percent, to $3.84 in
afternoon trading on news of the postponed filings.
