Nortel Networks CEO John Roth issued open letter to stockholders ...
Nortel Networks CEO John Roth issued open letter to stockholders Thurs. reassuring them that company was on sound ground, hadn’t done anything wrong to merit spate of shareholder suits in recent days and “will defend ourselves vigorously.” Company has…
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been hit by suits charging it misled investors by projecting strong 2001 revenue growth in Jan. 18 news release, only to revise guidance month later with greatly reduced growth estimate. Roth said Nortel acknowledged economic downturn in Jan. 18 news release but company still thought its first-quarter outlook was bright because it would take a while for downturn to affect it. “Based on previous experience, we had anticipated a longer lead time for the effects of a downturn to be felt by our sector,” Roth wrote. “The current downturn occurred with unprecedented suddenness and severity,” he said. Company revised its guidance Feb. 15, “as soon as the effects of this downturn were clear to us,” he said.