Nortel sales decline as customers cut spending

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Bankrupt Nortel Networks Corp on Friday posted a 62 percent drop in quarterly revenue, as customers cut spending in the face of uncertainty about its bankruptcy proceedings and the shaky economy.

Fourth-quarter revenue dropped to $794 million from $2.1 billion in the year ago period. It said sales fell across all of its business segments and regions. Once North America's biggest telecommunications equipment maker, Nortel filed for bankruptcy protection in January 2009. It is auctioning off its assets in an effort to pay back debtholders, rather than restructuring the business.

Nortel has already sold its fiber optic and ethernet businesses to Ciena and wireless assets to Ericsson. Net income for the quarter totaled $1.78 billion, compared with a loss of $2.14 billion in the period a year ago. Both periods included a raft of one-time items related to sales, job cuts and goodwill impairments. Nortel's gross margin dropped to 38.3 percent in the fourth quarter, a decrease of 2.7 percentage points from the year ago period.