Nortel Networks Corp has reduced its breakeven model again, and now hopes to have a target of $2.4 billion in place by the second quarter of 2003.
Given that the company confirmed that third quarter revenue will be $2.36 billion, it could reach its target of returning to profitability by June 2003, provided the market does not deteriorate further.
However, the third quarter figure will be 15% down on the previous three months
so unless the market has bottomed out, Nortel will have to engage in another
round of cuts to lower the figure further.
In July Nortel said it was examining its breakeven target of $3.2 billion and in
August revised it to $2.6 billion. So the current move down to $2.4 billion may not be the last step.