Ailing telecom equipment maker Nortel Networks Corp, now operating in bankruptcy protection, said on Monday its quarterly loss more than doubled as it booked over $2 billion in noncash writedowns and saw its sales plunge.

Demand for the technology that Nortel produces is continuing to wane as its big customers -- telecom companies and other corporations -- slash or postpone their spending amid the global economic crisis.

This customer reluctance to spend is one of the main reasons Nortel has been unable to dig itself out from a mountain of losses that have accumulated since the technology bubble burst at the start of this decade.

Nortel's sales swooned 15 percent in the fourth quarter, it said on Monday. The company filed for bankruptcy protection in January in a bid to try to restructure while keeping its creditors at bay.

Nortel, North America's biggest maker of telephone equipment, said it lost $2.14 billion, or $4.28 a share, in the three months ended December 31. In the same period a year earlier it lost $844 million, or $1.70 a share.

The Toronto-based company said revenue dropped to $2.72 billion from $3.2 billion a year earlier.

Analysts expected the company to turn in fourth-quarter revenue of $2.74 billion, according to Reuters Estimates.

Its market continued to deteriorate and customers either reduced or deferred spending, Chief Executive Mike Zafirovski said in a statement.

Nortel said its results included a $1.24 billion goodwill writedown, as well as a writedown of $951 million to reduce its deferred tax asset.

It also booked $97 million in charges related to its restructuring. Last week it announced another 3,200 job cuts around the world.


It said it would not provide forecasts due to limited industry visibility, continued global economic uncertainty and work taking place on a comprehensive restructuring plan under Nortel's credit protection filings.

Nortel said there would also be no conference call with management to discuss the results.

The company is likely to try to sell entire divisions as it fights to survive, analysts say. It provided no details on any asset sales on Monday.

Nortel said that for all of 2008, it lost $5.8 billion, compared with $957 million in losses in 2007.

Nortel said its fourth-quarter operating expenses were down 30 percent from the previous year as it slashes costs across the board and works on formulating a plan that will pull it out of creditor protection.

It said gross margin dropped to 40.4 percent in the quarter from 43.7 percent a year earlier. Operating margin rose to 11 percent from 7.6 percent a year earlier due to cost cutting.

In an executive change, Nortel said Pavi Binning, chief financial officer, will also take on the duties of chief restructuring officer.

Nortel filed for bankruptcy protection in Canada and the United States on January 14, blaming the economic crisis for derailing a turnaround effort that began in 2005.

It had about $2.4 billion in cash when it sought court protection from its creditors and about $4.5 billion in long-term debt, according to court documents.

The company's shares are almost worthless, trading unchanged at 10.5 Canadian cents on the Toronto Stock Exchange. In mid-2000, at the height of the company's success, the stock was worth more than C$1,100, adjusted for a share consolidation that took place in late 2006.

($1=$1.29 Canadian)

(Reporting by Wojtek Dabrowski; Editing by Peter Galloway)