Nortel Networks Corp. said Tuesday it expects to be able to assess the impact of its financial restatements by mid-to-late July and should be in a position to give limited preliminary results for the first two quarters of 2004 the following month.
In a release, the company said it now expects “to be in a position to provide updated assessments of the expected impacts of the restatements to the previously announced or reported financial results during mid-to-late July 2004.”
As well, it said, it also expects to be ready to deliver “limited preliminary unaudited” results for the first and second quarters of 2004 by mid August.
By the third quarter, it said, it should be able to file its full 2003 results along with its first and second quarter numbers.
Analysts responded positively to the latest development.
“By providing a timeline for the completion of the financial restatement process, we believe Nortel is offering up some light at the end of the tunnel,” Morgan Stanley analyst Alkesh Shah said.
“Furthermore, the glimpse into the impact of the restatement process in July and the preliminary (first and second quarter) results should serve to answer many questions around Nortel's business outlook and the margin structure.”
Brampton, Ont.-based Nortel is working on a restatement of financial results from Jan. 1, 2001, and onwards.
Last week, Nortel received court authorization to delay its annual shareholders meeting as it works through a massive review of its past accounting.
In April, Nortel shocked the markets with news that it had fired its chief executive officer Frank Dunn as it took measures to shore up its reputation amid a deepening accounting probe.
Separately, Nortel also said it will receive $675-million (U.S.) to $725-million in cash from its sale of manufacturing operations in Brazil and Canada to Flextronics International Ltd, with $75-million to $100-million in expected annual savings.
That essentially completes Nortel's five-year plan to divest the bulk of its manufacturing activities.
Singapore-based Flextronics is taking over Nortel's manufacturing plants in Canada, Brazil and has made an offer to buy operations in France and Northern Ireland. Nortel and Flextronics have been in talks since January.
© The Globe and Mail
Only GlobeinvestorGOLD combines the strength of powerful investing tools with the insight of The Globe and Mail.
Discover a wealth of investment information and and exclusive features.
