Friday, bankrupt Canadian network solutions company Nortel Networks Corp. (NRTLQ.PK) reported a profit in the fourth quarter, reflecting significant gain from sale of assets and cost reduction activities, compared to a loss last year.
Nortel Networks, that find it difficult to thrive in the financial turmoil and filed for bankruptcy protection in January, reported fourth quarter net profit of US$1.78 billion or US$3.34 per share compared to a net loss of US$2.14 billion or US$4.28 per share in the prior year quarter.
Net income from continuing operations for the quarter was US$1.1 billion or US$0.69 per share compared to a loss of US$1.71 billion or US$3.42 per share in the year ago period.
The profit for the quarter include a gain from discontinued operations of US$689 million related to the divestiture of the ES business to Avaya, reorganization items of US$1.26 billion related to the gain on the divestiture of the CDMA/LTE Access assets to Ericsson.
Prior year quarter was hurt by income tax expense of US$959 million due to the increase in valuation allowance against net deferred tax assets, a goodwill impairment charge of US$910 million and loss from discontinued operations of US$430 million. Further, the previous year were dented by interest expenses of US$85 million and special charges of US$85 million towards job cuts and cost reduction activities.
The company noted that ongoing negative economic conditions and the uncertainty created by its Creditor Protection Proceedings resulted in a decrease in customers' spending levels, as well as the sale of the CDMA/LTE Access and Enterprise, NGS and DiamondWare businesses in December 2009.
Fourth quarter total revenue plunged to US$794 million from US$2.07 billion in the comparable quarter last year. These revenues exclude fourth quarter revenues related to Equity Investees of $367 million and $300 million related to discontinued operations.
Gross margin for the recent quarter declined to 38.3% from 41% last year. Total operating expenses were reduced to US$371 million from US$1.4 billion in the year-ago quarter, resulting from a drop in SG&A expenses to US$158 million from US$233 million and decline in R&D expenses to US$149 million from US$236 million in the prior year quarter.
The company posted significant decline in revenues across its segments. Wireless Networks revenues were down 67% from the prior year at US$375 million, while Carrier VoIP reported a revenue of US$194 million, a decrease of 27% from the prior year. Sequential decline for Wireless Network was 43%. Metro Ethernet Networks' revenue was US$327 million that declined 29% from the previous year. LGN reported US$154 million revenue, with an year over year decline of 24% and a sequential fall of 50%.
For the fiscal 2009, the company reported net income of US$488 million or US$0.96 per share compared to a net loss of US$5.7 billion or US$11.64 per share in the prior year. Revenue increased to US$4.1 billion from US$2.1 billion a year ago.
NRTLQ.PK last traded at US$0.05, up US$0.01 or 25% on a volume of 13.13 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.