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TORONTO -- Nortel Networks Corp. (NT) announced late Thursday it plan to restate results for the past 3 1/2 years, as the company posted mixed third-quarter results.
Although the accounting review regarding previously recorded restructuring expenses is ongoing, the networking-equipment maker said it expects previously reported net loss figures for 2000 through 2002 to be narrowed.
Nortel said it has found nearly $900 million in liabilities on its balance sheet as of June 30 that "were either recorded incorrectly in prior periods or not properly released, or adjusted for changes in estimates, in the appropriate periods." The $900 million is about 7% of what the company had said its liabilities were as of June 30.
In addition, about $92 million in revenue recorded over the past 3 1/2 years should have been deferred to later periods. The revenue in question is 0.2% of what the company recorded over that period.
In a prepared statement, President and Chief Executive Frank Dunn said, "The challenges that faced Nortel Networks and our industry over the past few years were unprecedented. It is clear now that in such a volatile environment, errors were made."
Meanwhile, the company released what it said were preliminary third-quarter results, which are subject to change as a result of the accounting review. The restatements are expected to be finalized by year's end.
Nortel said net income was $179 million, or four cents a share, on revenue of $2.27 billion. The company didn't provide year-earlier results because of the accounting review.
The latest quarter's results included $70 million in restructuring charges and about $48 million in acquisition-related expenses. They were more than offset by nearly $56 million in earnings from discontinued operations a benefit of approximately $98 million related to changes in ownership of certain European operations and a $67 million benefit from the completion of a customer-contract settlement.
