Sales at Nortel Networks Corp. (NT) dropped 37 percent to $1.73 billion in the first quarter of 2009 and net losses amounted to $507 million, fueling speculation that the bankrupt equipment maker will sell its assets individually rather than restructure as a whole.
The $507 million compares to a loss of $138 million during the same period a year ago.
Nortel did not hold a conference call with analysts when it released its numbers on Monday. Instead, the company provided canned quotes from President and CEO Mike Zafirovski, who shed little light on whether Nortel will part itself out.
“Discussions are taking place with various external parties, however, decisions have not been taken and we continue to evaluate our restructuring alternatives,” Zafirovski said in the prepared statement. “To provide maximum flexibility we are also taking the appropriate steps to complete the move to standalone businesses.”
The company tried to emphasize the positive, saying both revenue and cash balances are stabilized. Nortel closed the quarter with $2.28 billion in cash.
Still, executives continue to cut costs. Nortel said it will separate the carrier sales and global operations functions over the coming weeks, to “enhance the business units’ overall responsiveness to changing customer and market requirements.” It’s also trying to make the Carrier Networks, Metro Ethernet Networks and Enterprise divisions, and the LG partnership, standalone businesses.
Nortel blamed its January bankruptcy declaration, as well as the global economic recession and poor foreign exchange rates, for its lower first-quarter results.