By Alex Scroxton
17 September 2008
Nortel Networks has become the latest tech company to cry
foul over the worsening economic climate, after revising its full-year outlook
downwards, and has admitted it is seeking to explore a divestiture of its metro
Ethernet network (MEN) unit.
Canada-based Nortel’s warning comes just hours after both
broadline distributor Ingram Micro and PC vendor Dell issued negative trading
statements.
According to CEO Mike Zafirovski, full-year revenues are
expected to slip between 2% and 4%, with Q3 revenues coming in at around
$2.3bn.
Nortel complained that a decline in capital expenditure
among carrier customers had hit harder than expected, and added that deferred
IT investments among enterprise and metro Ethernet customers were also starting
to bite.
In a statement, Nortel said that since reporting its Q2
numbers it had started to see further pressure on revenue due to foreign
exchange impact and product delivery delays.
Zafirovski said: “It is clear that the environment in which
we operate requires immediate and decisive actions. A comprehensive review of
our business is taking place and we are determined to reshape the company to
establish a clear path for renewed value.”
He added that the divestiture of the MEN unit would go some
way to strengthening Nortel’s flagging balance sheet and funding the
anticipated restructuring.
