Nortel has announced that it will have to delay its financial report once again, this time for the year 2005. The Canadian vendor will also need to restate its results for 2003, 2004 and the first nine months of 2005.
The restatement is primarily due to revenue incorrectly recognised in prior periods that should have been deferred to future periods, Nortel said, and comes soon after the company was rocked by an accounting scandal.
"Our priority is to have accurate financial information. Although the need to restate certain financial statements is unfortunate, it is the right thing to do," said Mike Zafirovski, president and chief executive at Nortel.
"This revenue is real, but it was recognised in the wrong periods. The restatements do not affect the company's cash position."
In preliminary results for the fourth quarter of 2005, the networking firm reported revenues of $2.95bn, compared to $2.59bn for the fourth quarter of 2004.
Net loss for the three month period was $2.21bn, down from a profit of $107m in the fourth quarter of 2004.
Net loss in the fourth quarter of 2005 included a litigation expense of $2.47bn as a result of an agreement reached in principle for the proposed settlement of certain shareholder class action litigation, and a tax benefit of approximately $140m related to a liability release as a result of a transfer pricing resolution.
The company is in continuing mediation discussions regarding the proposed settlement.
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