Nortel: a market leader in fibre optics

"While I am disappointed with our results for the second quarter," said chief executive John Roth, "we have taken the right steps in this environment to strengthen Nortel Networks leadership position."

Nortel said it brought in $4.61bn (�3.23bn) in the second quarter, substantially lower than the $7.21bn (�5.05bn) it saw just a year ago.

Still it was better than analysts had thought. Consensus estimates had put the companies profit figure at $4.47bn.

Job cuts

Nortel's figures include charges for restructuring, including thousands of job cuts announced earlier in the year.

Without the charges, the Canadian telecom-equipment giant lost $1.55bn, or 48 cents a share.

Nortel also said 7,000 jobs will be cut over the next eight weeks, the balance of the 30,000 job cuts it announced earlier in the year.

Anxious investors bid up Nortel's stock price in Thursday trading. Shares of the company ended the day up in Toronto 30 Canadian cents to C$11.90. Meanwhile on the New York Stock Exchange, Nortel shares advanced 17 cents to $7.75.

Last month, Nortel shocked stock markets by reporting a large increase in losses and slashing 10,000 more jobs.

The company blamed the losses on the sharp downturn in the industry and the cost of restructuring its business.

And the firm - Canada's largest - has been placed on review for a possible downgrade by Moody's, a credit-rating agency.