Nortel just can’t seem to quit its accounting troubles.
The company revealed Friday that it will restate 2003-2005 results and some earlier results after an ongoing review turned up instances where revenue was recognized sooner than it should have been.
The revisions won’t affect Nortel’s cash position, but the company’s delay in filing required reports could hurt its debt rating and place it in default with creditors, something the company said it will work to avoid. But the news was another blow for a company trying to reestablish credibility with investors.
For 2005, Nortel reported a loss of $2.41 billion, due largely to $2.47 billion in shareholder lawsuit settlements from previous accounting lapses. Sales were $10.83 billion, up 11% from 2004.
“2005 was an important year,” Nortel CEO Mike Zafirovski said in a statement. “The business was stabilized and we began to set the foundation for the future. Because of Nortel’s strong technology solutions and customer relationships, we grew our business in 2005 for the first time in five years. We are, however, certainly not satisfied with our financial results, which in my opinion have not been good in terms of growth, operating margins and cash flows since 1998. We are working diligently to rectify this and we expect that you will start to see improved results during 2006.”
Nortel shares lost 2.3% Friday.
The broader market, meanwhile, surged after the government’s monthly jobs report came in stronger than expected, while wage growth remained relatively tame. Blue chips led the rally.
The Nasdaq rose 12 to 2262, the S&P 500 gained 9 to 1281, and the Dow surged 104 to 11,076. Volume declined to 2.12 billion shares on the NYSE, and 1.78 billion on the Nasdaq. Advancers led 22-9 on the NYSE, and 19-10 on the Nasdaq. Upside volume was 74% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 123-45 on the NYSE, and 100-55 on the Nasdaq.
Adtran lost 4% on a warning, and McData
lost 2.5% on its results.
Jupitermedia , publisher of this Web site, gained 3.7% on its results.
