TORONTO - Nortel Networks Corp. has posted a US$508 million loss in the third quarter a fraction of its losses a year earlier -- as revenues weakened due to the tough economy, and it worked to sell off pieces of its business.
The insolvent telecom equipment maker said Monday the results compared to a $3.4 billion loss a year earlier, or $1.02 per share versus a loss of $6.85 per share in the year-ago period.
The former Canadian tech heavyweight has been selling off its operations after filing for court protection from creditors earlier this year.
The results included a loss of $164 million from discontinued operations, $223 million in reorganization costs mostly from pension liabilities, an interest charge of $75 million and $46 million in other charges.
Revenues slid to $1.27 billion from $1.6 billion on declines across all business segments led by a weaker economy and uncertainty over the future of Nortel as it undergoes sales of its assets.
Last week, Nortel cancelled of an auction for its optical networking and carrier ethernet units and the conclusion of a sale of its wireless network business to LM Ericsson of Sweden for $1.13 billion.
The said it was still in talks with interested parties for the optical networking and carrier ethernet unit and set a Nov. 17 deadline for bids on the businesses.
U.S.-based Ciena Corp. (NASDAQ:CIEN) has already made a US$521-million bid for the assets, which include some of Nortel's most prized businesses units, intellectual properties and employees.
Bankruptcy court judges in both Delaware and Ontario gave the "stalking horse" bid a green light in mid-October after the companies presented a reworked auction plan. The judges were unhappy with some of the specifics of the initial bid, including the amount Ciena would be paid if its bid was unsuccessful.
Nortel has already sold off its enterprise solutions division to New Jersey-based Avaya for $900 million.
Avaya had originally bid $475 million in July but then had to sweeten the offer to win an auction that began Sept. 11 and lasted several days.
A deadline for offers on its Global System for Mobile (GSM) businesses was extended last month from Nov. 9 to Monday.
The company plans to sell its global GSM/GSM-R business, including the patents predominantly used in the GSM business and granting of non-exclusive licenses of other relevant patents, in an open auction.
