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Nortel to post 1Q loss
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February 15, 2001: 5:11 p.m. ET
Telecom equipment maker also plans 10,000 job cuts in wake of slowdown
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NEW YORK (CNNfn) - Nortel Networks warned Thursday that a sector slowdown will cause the telecommunications equipment maker to post a first-quarter loss and cut 10,000 jobs.
A severe economic downturn in the U.S. will cause the overall market to slow by 10 percent this year. Nortel, which makes voice and data networking equipment, expects the slowdown to continue into fourth quarter.
Toronto-based Nortel (NT: Research, Estimates) now expects to report $6.3 billion in first-quarter revenue and an operational loss of 4 cents a diluted share.
News of the warning caused Nortel shares to plunge, falling by $6.70 to $23 in after-hours trading on Instinet.
"We are seeing longer than expected delays in spending by our U.S. customers as they continue to assess the impact of the economic and market conditions on their businesses," said Nortel CEO John Roth.
 Growth in Europe and in Asia Pacific and Latin America offset the declines, Nortel said.
In January, Nortel announced that it would lay off about 4,000 full-time employees in the near term but expected to finish 2001 with the same number of employees it had last year. Nortel now expects to cut 10,000 employees through streamlining and realignment activities. Attrition and retirement will also impact the job cuts, the company said in a statement.
Last month, Nortel projected revenue and earnings per share to each grow by 30 percent. The telecom equipment provider now anticipates revenue in 2001 to grow by 15 percent and earnings per share to increase by 10 percent.
Earnings tracker First Call had expected the company to report income of 16 cents a share in the first quarter and 96 cents a share for all of 2001. 
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