Nortel Networks has announced its financial performance for fiscal year and first quarter 2001, and expressed optimism in the face of uncertainty.
According to John Roth, president and chief executive officer, “While we previously noted that economic uncertainties and capital constraints were impacting our outlook, we are now seeing a faster and more severe economic downturn in the United States which we now expect will result in a slower overall market growth of approximately 10% in 2001.
“We are seeing longer than expected delays in spending by our US customers as they continue to assess the impact of the economic and market conditions on their businesses.
“We now expect the US market slowdown to continue well into the fourth quarter of 2001. Partially offsetting the impact of the US market slowdown is the continued solid growth we are seeing in Europe and in the Asia Pacific and Latin America regions.”
“Even with the current economic and market uncertainty, we continue to believe that Nortel Networks, with our global reach and industry-leading portfolio, is ideally positioned to gain market share and continue to grow revenues faster than the overall market growth rate. We now expect growth in revenues and earnings per share from operations in 2001 over 2000 of 15% and 10% respectively. For the first quarter of 2001, we expect revenues of $6.3 billion and a loss per share from operations of $0.04 on a diluted basis,” Roth added.
“No other company is as well positioned in the market today with our leading portfolio and management bench strength as Nortel Networks,” concluded Roth. “We are strengthening our hold on being the world’s leading provider of profitable, high-performance Internet and communications solutions for our customers around the world. We are seen as a company that our customers can confidently move forward with. There should be no confusing the current economic downturn in the United States, and the adjustment we are announcing today, with Nortel Networks overall health and our market leadership position.”
The company estimates that there will be a reduction this year of approximately 10,000 employees, 2000 through these streamlining and realignment activities. Approximately 6,000 employees have been addressed to date. The number of affected employees is expected to be minimized as a result of normal attrition, including retirement.
Nortel Networks is a global Internet and communications leader with capabilities spanning optical, wireless, local Internet and eBusiness. The company had 2000 US GAAP revenues of $30.3 billion and serves carrier, service provider and enterprise customers globally.