Nortel reported 1Q09 results today, six weeks after the end of the quarter and three months after entering Chapter 11. Revenues were down in every category and every region. Overall revenues were down by 37% compared to 1Q 2008. In terms of dollars, the Carrier Networks made the biggest dive (down $481 million or 32%), while Enterprise's decline was greatest in terms of percent (41%) to $395. The company reported a loss of $507 million.
Despite these disappointments, the company also reported that cash on hand increased by some $80 million to $2,480 million despite foreign exchange losses ($54 million), cash used in financing activities ($48 million) and cash used in investing activities ($18 million).
{shadowboxwtw2}With revenues of only $1,732 million, Nortel produced $200 million more cash from operations.{/shadowboxwtw2} The cash was produced a little 'unfairly' due to radical restructuring while in Chapter 11 (job lost with no severance, creditor protection so no interest payments, pension truncation to reduce obligations, severance cessation to those already) amid declining significantly declining sales.
Nortel has until July to submit its restructuring plan and escape Chapter 11, however, there's always the chance that management will ask for an extension to October.
