Nortel cuts outlook, plans to sell assets
Published: 18 Sep 2008 09:15 BST
Telecommunications-equipment maker Nortel announced on Wednesday that it has slashed its business outlook and is looking to sell some of its assets as the economy worsens.
Nortel said its revenue for 2008 will be between two and four percent lower than it was the previous year. Third-quarter revenue will be about $2.3bn (£1.3bn), short of the $2.66bn that some analysts had expected.
The company blamed its woes on phone companies and large corporate customers, which have been cutting back on their capital expenditures more than had been expected. Nortel chief executive Mike Zafirovski said the company is conducting a comprehensive review of its business, and looking for a buyer for its metro Ethernet equipment business.
At an analyst conference on Tuesday, Cisco, which competes with Nortel in some areas, reiterated its confidence in its long-term growth projections of between 12 and 17 percent. Chief executive John Chambers said he expects slower near-term growth, as customers tighten their belts, but, even in the short run, Cisco still expects to grow 10 percent.
Cisco has diversified its business in different areas and has always been focused on Internet Protocol technology. The company is also pushing video technology as a main growth area. On the other hand, Nortel's products are focused on telecommunications, a segment that has come under severe pressure lately.
Credit: Nortel slashes outlook, looks for asset buyers from CNET News
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