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To: pdrrn69 who wrote (36017)	10/2/2001 5:27:00 PM
From: Greg h2o	Respond to of 42804

from the wsj: October 2, 2001 Nortel to Make More Job Cuts, Projects Deep 3rd-Quarter Loss A WALL STREET JOURNAL ONLINE News Roundup BRAMPTON, Ontario -- Nortel Networks Corp. late Tuesday issued an outlook for its third quarter and said it would cut more jobs, paring down its work force to 45,000. The telecommunications-gear maker also announced that Chief Financial Officer Frank A. Dunn will succeed John A. Roth as president and chief executive officer effective Nov. 1. Mr. Roth, who has served as CEO since October 1997, told the company in April that he planned to step down. He will remain as vice chairman of Nortel's board through 2002. Nortel, which didn't offer forward-looking guidance when it reported second-quarter results in July, said it expects third-quarter revenue from continuing operations to come in at roughly $3.5 billion. The company projects a pro forma net loss from continuing operations of about $910 million after tax. Including about $1.3 billion in incremental charges, about $735 million in restructuring charges and $650 million in amortization charges, the company said it expects to report a net loss of roughly $3.6 billion. Analysts surveyed by Thomson Financial/First Call expect Nortel to post a loss of 21 cents a share in the third quarter. The company said that it is starting to see early indications that service-provider spending on capital equipment is "approaching sustainable levels." Latest Round In the latest round of cuts, the company said it hopes to shed about 10,000 positions -- but it wasn't immediately clear if that was through layoffs or unit sales, or a combination. The company will take a related charge in the fourth quarter. It expects to notify all the affected workers by the end of the month. Nortel has been furiously slashing expenses and jobs, and said in July that it had trimmed about 23,000 of its slated payroll reductions totaling 30,000. Nortel had 94,500 employees at the start of this year, when the company first began cutting jobs. In the company's second quarter, it reported a loss of $19.4 billion, one of the largest in corporate history, as the company recorded a slew of charges and a write-down tied to the sharp downturn in the sector. Nortel is slated to announce third-quarter results Oct. 18. The company said results will include an $815 million before-tax restructuring charge for job cuts the company announced in June and the closure of related facilities. Results also will include a charge of about $240 million before tax, mostly related to an estimated 50% reduction in the manufacturing and systems house capacity of its photonic components. Nortel said it has seen a "significant" improvement in its cash management in the latest quarter, noting that it didn't have to draw on any of its existing credit facilities. Clarify Unit Is Sold It said it will raise $700 million from asset sales that have already been announced, most of which it will receive in the next six months. Earlier Tuesday, Nortel said it agreed to sell substantially all of its Clarify assets for $200 million cash to Amdocs Ltd., only two years after acquiring the assets and ending several months of speculation. When the Clarify purchase was first announced in October 1999, it had a value of about $2.1 billion. Under the terms of the deal, Nortel will sell patents, intellectual property and trademarks of its customer-relationship management unit to Amdocs, which will assume existing customer contracts and certain leased office space. The companies expect to complete the transaction in the fourth quarter. Amdocs said it expects Clarify to add to cash earnings in fiscal 2002 and thereafter. Amdocs will record an acquisition-related charge in the first quarter, which ends Dec. 31, to account for certain costs relating to the deal, primarily the write-off of purchased in-process research and development. At 4 p.m. Tuesday on the New York Stock Exchange, Nortel shares fell 18 cents, or 3.3%, to $5.29.