Nortel?s shares fell 12 per cent to a 52-week low on the warning that revenue growth will be lower than expected for both the quarter and the year.
The company insisted that earnings were on target and that revenue growth would be in double digits - just. Chief executive John Roth denied that the merger with Bay Networks is proving more difficult than planned.
He said: ?The customers are buying...they are seeking to unify their networks by buying from fewer suppliers...and choosing end-to-end suppliers that offers high-performance, mission-critical solutions.?
US analysts said the volume of share trading was an over reaction, but Nortel?s news reinforced the view that large carriers are cutting back on capital spending with suppliers like Nortel and Alcatel, which also issued an earnings warning earlier this month.
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