Rumors continue to fly.
Nortel's Roth May Have `Telegraphed' Shortfall,
Globe Says
By Joe Schneider
Toronto, Feb. 21 (Bloomberg) -- Nortel Networks Corp.'s chief executive may
have ``telegraphed'' concerns about the company's ``short-term'' prospects to
clients of an investment firm before publicly disclosing lower growth forecasts
that drove down Nortel stock, the Globe and Mail reported, citing a note from
an analyst.
CEO John Roth took part in a Feb. 12 Webcast to institutional and retail
clients of RBC Dominion Securities in which he was interviewed by the firm's
telecommunications analyst, John Wilson, the Globe said.
Following the Webcast Wilson wrote a note to clients that was distributed the
next day, two days before Nortel's advisory that growth would be lower than
expected.
``In our view, Nortel presented a more cautious outlook for growth in the first
half of 2001,'' Wilson wrote, according to the Globe.
The call could become central to a review by the Ontario Securities
Commission of last week's announcement that the biggest maker of fiber-optic
equipment was headed for its first quarterly loss since 1993, the Globe said.
Nortel shares have fallen 37 percent in Toronto since the announcement.
The OSC initiated its review to determine whether Nortel's change in profit and
growth forecasts was adequately disclosed to shareholders, the paper said.
The company said Thursday that it expects a first-quarter loss of 4 cents a
share. It had earlier forecast profit of 16 cents a share. Nortel also cut its
full-year sales forecast by half, to an increase of 15 percent.
(Globe and Mail, 2/21, A1) |
