Nortel takes annual loss to $5.8bn in 2008

Nortel Loss Hits $5.8Bn

Canadian equipment vendor Nortel, currently sheltering in Chapter 11 bankruptcy protection, reported a whopping $5.8bn loss for 2008, up from a $957m loss in 2007.

Fourth quarter loss more than doubled from $844m to $2.1bn in the final three months of 2008.

Annual revenues remained almost flat at $10.4bn, and dipped slightly in the fourth quarter to $2.7bn.

As expected, there were a lot of goodwill write downs which took their toll on the company’s finances. Total goodwill write downs for the year amounted to $2.4bn, alongside tax hits of over $3bn.

Carrier network revenues were down 8 per cent in the fourth quarter to $1.23bn, as operators reigned in on spending. Metro Ethernet and global services revenues were also down 14 per cent and 12 per cent year on year respectively.

Somehow the company still had a cash balance of $2.4bn at the end of the fourth quarter of 2008, up from $2.3bn at the end of the third quarter.

Under the “Business Highlights” section of the results, Nortel said that beginning with the first quarter of 2009, the company will report financial results under a new operating model with four business units; Carrier Networks, Enterprise Solutions, Metro Ethernet and the LG-Nortel joint venture.