Nortel Networks shares sink after 2Q loss widens

Nortel Networks held guidance for the full fiscal year steady but advised of challenges from the weak economy, higher competition and lower spending by certain customers.

Investors sent the stock down $1.12, or 14.7 percent, to close at $6.52. Shares have ranged from $5.73 to $22 over the past year.

In a research note, RBC Capital Markets analyst Mark Sue wrote that Nortel's report of lower orders and deferred revenue from the first quarter may indicate third-quarter revenue below Wall Street's view.

"Nortel's revamped management team is doing a commendable job given the macro challenges and the limited internal resources," Sue wrote.

The analyst maintained his "Sector Perform" rating and $8 price target on the stock.