TORONTO - Nortel Networks Corp. said Wednesday it will cut 2,100 jobs -- about 6 percent of its work force -- as it reported its fourth-quarter losses had widened, sending its shares tumbling.
The Canadian telecommunications equipment maker reported a loss of $844 million, or $1.70 per share, compared with a loss of $80 million, or 19 cents per share, a year earlier.
The company's stock shed nearly 13 percent, losing $1.46 to $9.99 in afternoon trading.
Analysts polled by Thomson Financial had predicted earnings of 57 cents per share, though such estimates typically exclude one-time charges, like those recorded by Nortel as it restructures.
The company took $38 million in charges associated with its restructuring programs, compared with $29 million, a year earlier. It recorded a $1.06 billion charge related to changes in its Canadian tax profile.
Nortel said it plans to cut about 2,100 jobs globally and will shift about 1,000 additional jobs to lower-cost countries in Asia and Europe. The company has just over 30,000 employees now, down from almost 100,000 before the tech bust in 2000.
Mike Zafirovski, Nortel's president and CEO, said the company faces a "challenging environment" and said the economic slowdown in the U.S. is affecting business.
"There is some concern over it's impact in the rest of the world. From our perspective, in our outlook in 2008, it's pretty flat revenue on the carrier side, which is about half of our business," Zafirovski said in a telephone interview.
Zafirovski acknowledged attempts to turn Toronto-based Nortel around hasn't been easy.
"I've never seen a turnaround where you miraculously fix the business over night," said Zafirovski, a former executive at Motorola Inc. and General Electric Co. who joined the company in 2005.
"We knew what we got into. The economy is not helping per se, but we're playing the cards which we have."
Revenue for the period that ended Dec. 31 fell 4 percent to $3.2 billion from $3.32 billion in the previous year.
Analysts expected sales of $3.28 billion.
Banc of America Securities analyst Tim Long kept a "neutral" rating on Nortel's stock and $20 price target.
"We believe many challenges remain, given the competitive environment, carrier spending trends and the ongoing restructuring efforts," Long said in a client note.
Nortel reported operating margins of 7.6 percent, below Long's estimate of 9.6 percent, he said, noting that margin improvements in the past quarter did not carry over.
"We view this as a sign that the recovery will take longer than we had anticipated," Long said.
Nortel reported an annual loss of $957 million, or $1.98 per share, compared with a profit of $28 million, or 6 cents per share, in the prior year.
Full-year sales dipped 4 percent to $10.95 billion from $11.42 billion a year ago.
Nortel said it expects 2008 revenue growth in the low single digits.
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