Nortel loss widens

Nortel 3-month TSX chart

Nortel Networks Corp. shares retreated more than 15 per cent on Friday after the company reported a deeper-than-expected second-quarter loss.

Shares of the Toronto-based telecommunications company fell $1.19 to close at $6.66 on the TSX.

Prior to the opening of trading, Nortel said it posted a Q2 loss of $113 million US, or 23 cents a share, which included a $67 million charge for restructuring and $21 million in losses on interest rate swaps plus $34 million in foreign-exchange gains

A year ago, the company lost $37 million, or seven cents a share.

Nortel's sales for the April-June quarter were $2.62 billion, up two per cent from a year earlier.

Factoring out one-time charges, Nortel lost 11 cents per share in the second quarter. Analysts polled by Thomson Financial had been looking for a loss of four cents a share on revenue of $2.5 billion.

Nortel reaffirmed its earlier earnings outlook for the full year, but noted it "faces a challenging business environment with increasing risk due to general macroeconomic weakness, continuing competitive pressures and potential of further reduced [capital expenditure] spending by key North American CDMA customers."

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