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"One of our top priorities is to re-energise our people after what they went through in 2001," said Frank Dunn in a conference call. "I personally feel very sorry for what has happened and apologise to shareholders and employees." Dunn took over as chief executive from John Roth towards the end of 2001.
This is likely to be cold comfort to the 41,900 staff let go by Nortel during 2001, including 265 job losses in October at its Galway and Belfast facilities. In fact, in 2001, headcount at the company's Galway facility shrank steadily from 700 to 400 at year's end. Meanwhile in Belfast, as many as 850 Nortel workers were made redundant in 2001 leaving that facility with a headcount of around 1,150. Worldwide, the company currently employs 52,600 people with a target to reduce this further to 48,000.
And although the company's latest results met its expectations, Nortel's shareholders and employees are unlikely to be bowled over by them. Nortel said its pro-forma loss for Q4 2001 was USD506 million, or USD0.16 a share. Analysts had expected a USD0.17 a share loss. This compared to a profit of USD830 million, or USD0.26 a share, in Q4 2000.
Net loss for the quarter, including acquisition and restructuring costs, was USD1.8 billion, or USD0.57 a share, which was USD0.06 less than the company had anticipated. In Q4 2000 its net loss was USD1.2 billion. The company said that the net loss had been smaller than expected because it sold off some of its businesses towards the end of the quarter.
Sales in the fourth quarter of USD3.46 billion were down 60 percent from the same period a year ago, although this figure did slightly beat Nortel's guidance figure.
In terms of sectors, revenues in the company's Metro and Enterprise Networks segment were down 53 percent in the fourth quarter of 2001 compared to the fourth quarter of 2000, and its Wireless Networks also saw a fall in revenues year-on-year of 21 percent in the fourth quarter. The company said there were "considerable decreases" in revenues from Europe and Latin America in its wireless business. Its Optical Long-Haul Networks segment experienced the biggest drop with revenues in Q4 2001, falling 89 percent from Q4 2000.
Looking forward, the company's chief executive had some good news and bad news. The bad news was that revenues are likely to fall even further in the next quarter, while the good news is that Nortel should return to profitability in Q4 2002, Dunn said.
"At this time, market visibility remains limited given the uncertainty of the economic downturn and its impact on our customers' businesses and spending plans," said Dunn. "We currently expect our revenues in the first quarter of 2002 will be lower than the fourth quarter of 2001 by approximately 10 percent. For 2002, we expect an ongoing steady improvement from our fourth quarter 2001 performance and to return to profitability in the fourth quarter of 2002."
For the full year ended 31 December 2001, Nortel said sales were USD17.1 billion and its total loss was USD27.3 billion, or USD8.56 a share. In 2000, its revenues were USD27.9 billion and its loss USD3.5 billion, or USD1.17 a share.
Nortel has traded in a 52-week range of USD4.76 to USD40.50 in New York and at the close of trading on Thursday was at USD7.74.
Nortel employs over 1,500 people at its Irish operations. A spokesperson for the company was not available to comment on the results and their implications for the company's employees at the time of going to press.
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