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To: bigbuk who wrote (56717)	8/27/2002 7:47:13 PM
From: Rocket Red	Read Replies (2) \| Respond to of 62348

NT Big Haircut tomorrow with this NEWS RELEASE Nortel Networks Corp - News Release Nortel Q3 revenues to fall short; job cuts expected Nortel Networks Corp NT Shares issued 3,213,742,000 Aug 27 2002 close $ 1.91 Tuesday August 27 2002 News Release Ms. Tina Warren reports NORTEL NETWORKS UPDATES THIRD QUARTER 2002 OUTLOOK AND BREAKE ... Nortel Networks expects revenues from continuing operations for the third quarter of 2002 to be lower than its previously stated guidance, primarily due to further reductions in spending by service providers in the United States. In light of the additional pressure on spending in the near term, and the continuing expectation for continuing pressure on customer capital spending well into 2003, the company is also taking additional actions to lower its quarterly break-even cost structure. "We continue to see reductions in near term spending plans by service providers especially in the United States," said Frank Dunn, president and chief executive officer, Nortel Networks. "Despite the reduction in capital spending and revenues, we continue to expect ongoing sequential pro forma bottom line improvement in the third quarter and fourth quarters of 2002, reflecting the impact of our ongoing restructuring activities. We now expect revenues from continuing operations in the third quarter of 2002 to be lower than second quarter 2002 revenues by up to approximately 10 per cent, compared to our previous view of 'essentially flat.'" Mr. Dunn continued: "Our top priority remains to return to profitability by the end of June, 2003. In our drive to achieve this goal, and in light of the ongoing pressure on customer capital spending plans globally, we are taking steps to further reduce our quarterly break-even cost structure (not including costs related to acquisitions and any special charges or gains) to below $2.6-billion (U.S.). This compares to our previously stated quarterly break-even cost structure, on the same basis, of approximately $3.2-billion (U.S.). Our focus will be on simplifying the structure around our three businesses and ensuring that a more direct connection exists between our operations and customer facing teams. This approach will allow us be even more responsive to our customers' needs, while reducing our cost structure. "We are making excellent progress with our customer engagement and the development and deployment of our leadership portfolio. However, the market environment continues to be challenging with lower spending levels than previously expected and a more prolonged industry transition. While we continue to align our business to this environment, we remain committed to our previously stated priorities to: return to profitability in the near term; focus on providing quality solutions that meet our enterprise and service provider customer needs; and drive for market leadership through technology innovation," concluded Mr. Dunn. These actions will result in additional charges associated with work force reductions and related facilities closures and streamlining. Although the plans and associated costs are in the process of being finalized (and will be provided as part of the company's third quarter 2002 results), the company noted that it has sufficient to finance both these actions and its operations, without using its bank facilities (all of which remain available and undrawn). The company expects the restructuring activities to be substantially completed by end of the fourth quarter of 2002. When ultimately completed, the company expects a work force of approximately 35,000. WARNING: The company relies upon litigation protection for "forward-looking" statements. (c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com old url (better for printing)