Nortel… Oops I did it again

Back in the day, when satellite television was a new new thing for rest of the planet, I used to watch The Bold & The Beautiful. It was a guilty pleasure for some months, but then I quickly lost interest. The story did not change much, though the faces did change. Some characters became more beautiful, and others became less bold. Its been a few years I have even thought about the show, and the reason I did today, well because of Nortel Networks’ latest announcement that it will restate results….. again.

How many times have we heard the same story from the same company? “This revenue is real — it was recognized in the wrong periods. The restatements do not affect the company’s cash position,” said a statement from CEO and President Mike Zafirovski. Oh come on now, you are no Chinese economy, that you can’t figure out what the hell is going on. A big NYSE company cannot keep its books properly?

“This time, it’s focused on contracts signed last year. And although the company insists it isn’t material, the perception that Nortel is still trying to resolve its accounting scandal is troubling. At some point, Nortel needs to have a clean slate so it can move forward strategically,” writes Mark Evans.

On a more recent tip, it seems the company is doing well – or that is it decides to re-state its results …. In the fourth quarter 2005 company lost $2.21 billion, or 51 cents a share which seems terrible when compared to a net loss of $107 million, or 2 cents a share in the fourth quarter 2004. Since, this net loss includes a one-time special item – $2.5 billion or 57 cents a share to settle a shareholder class action litigation, the company actually earned 6 cents a share in the 4Q 2005, about two pennies better than what analysts were expecting.