Nortel announces another restatement

Nortel Networks Corp.said Thursday it will have to make more financial restatements and will delay filing its 2006 annual report with U.S. regulators.

The company said the changes will correct revenue that was incorrectly recognized in earlier periods, plus errors in actuarial calculations made by outside parties in Nortel's North American pension and post-retirement plans.

In the wake of the annoucement, shares of Nortel lost 1.6 per cent. The stock shed 56 cents to end at$34.50.

The changes mean Nortel's revenue for the first nine months of 2006will increase by $24 million US, while its net earnings will go up by $15 million US.

The company's 2005 revenue will be cut by $28 million US and its net loss will grow by $87 million US. For 2004, the company's revenue will go down by $33 million US and its loss will grow by $42 million. For years prior to 2004, Nortel expects a drop in revenue of $27 million US and a $5 million US cut in net earnings.

"This restatement has no material impact to our fourth quarter 2006 operating expectations or performance," Peter Currie, Nortel's executive vice-president and chief financial officer, said in a release.

"During 2006, we have implemented significant remedial measures and other actions to address our internal control weaknesses," Currie said. "This has resulted in a substantial reduction of control weaknesses as at year end and represents a major milestone in our journey toward consistent, reliable and timely financial reporting."

Nortel said it plans to file its 2006 annual report with the U.S. Securities and Exchange Commission no later than March 16.

Nortel has had to restate its 2003, 2004 and 2005 results to fix accounting problems.