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Nortel to restate profits yet again

Telecommunications giant has to restate profits again following 'third-party re-measurements'
Written by David Meyer, Contributor

Canadian telecommunications giant Nortel has announced it will have to restate its accounts yet again.

The latest problems, announced on Thursday, appear to centre on changes the company has been making to its pension plans. According to Nortel, "third-party actuarial firms retained by the company performed re-measurements of the US and Canadian pension and post-retirement plans in the third quarter of 2006, at which time one of these firms discovered potential errors (generally originating in the late 1990s) in the historical actuarial calculations they had originally performed on the US pension plan assets".

The company only recently said it was settling a lawsuit brought against it by its shareholders following an accounting scandal over results dating from 2000. That debacle saw several senior executives — including chief executive Frank Dunn — fired and a criminal investigation launched against Nortel after a string of profits restatements.

The new restatement seems to be relatively minor, according to a Merill Lynch analyst who estimated them to be in the region of $10m (£5.15m). However, that analyst also noted that there have as yet been no "tangible results" from Nortel's ongoing restructuring plan, and maintained the company's "neutral" rating.

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