Nortel will restate financial results for 2003, 2004 and the first nine months of 2005, and will have adjustments to periods prior to 2003, primarily due to revenue incorrectly recognized in prior periods that should have been deferred to future periods.
The company currently expects revisions to its previously reported 2003 and 2004 financial results reflecting negative impacts on revenue of $157 million and $77 million and on net earnings/loss of $91 million and $93 million, respectively, as well as revisions to its previously reported 2005 nine month results reflecting negative impacts on revenue of $162 million and on net earnings/loss of $95 million in the aggregate. With respect to financial results prior to 2003, the Company currently expects revisions reflecting negative impacts on revenue of $470 million and on net earnings/loss of $99 million, in the aggregate.
In addition, Nortel reported Q4 2005 revenues of $2.95 billion compared to $2.59 billion for the fourth quarter of 2004 and $2.62 billion for the third quarter of 2005. The company reported a net loss in the fourth quarter of 2005 of $2.21 billion, or $0.51 per common share on a diluted basis, compared to net earnings of $107 million, or $0.02 per common share on a diluted basis, in the fourth quarter of 2004 and a net loss of $110 million, or $0.02 per common share on a diluted basis, in the third quarter of 2005.
Net loss in the fourth quarter of 2005 included a litigation expense of $2,474 million, or $0.57 per common share on a diluted basis, as a result of an agreement reached in principle for the proposed settlement of certain shareholder class action litigation and a tax benefit of approximately $140 million related to a liability release.
http://www.nortel.com
