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Nortel In Trouble
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Posted by: TotalRecall
Nortel, most widely known for it's networking and telephony solutions, is in a state of distress reporting a major loss for this quarter, an inventory of $650 million, and 'intangible assets' of $12.3 billion. Here's a snip from a report at Wireless News Factor:
Combining the ongoing operations outlook and the effect of an ongoing alignment plan, Nortel now expects a net loss of about US$19.2 billion in the second quarter, or roughly the equivalent of 57 percent of its market capitalization, based on Thursday's closing stock price.
In April, after several years of aggressive spending and expansion, particularly on its optics-related business, Nortel announced it would go through streamlining and realignment, resulting in losses and the elimination of 20,000 jobs worldwide. The new update, which adds an additional 10,000 job cuts, shows that the company is basically bleeding green and saddled with loads of inventory.
The article reports that this may be a dominoe like effect, also harming the stocks of other similiar companies. Grab the full story here.
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