Nortel Networks shares dropped 12 percent Tuesday after the telecommunications equipment maker warned that economic weakness in Asia would hamper its third-quarter revenue growth.
Nortel (NT) officials said they expect third-quarter revenue growth in the low double digits. The company said it still expects to meet the consensus earnings forecast of 39 cents a share.
Nortel shares plunged US$4.88 to $35.88 on the New York Stock Exchange.
Last year, Nortel's third quarter revenues rose 15 percent, and analysts had expected a similar growth rate this year. Weak Asian economies and a strong dollar are causing the slowdown, analysts said.
Nortel's announcement follows a warning from rival telecom equipment maker Alcatel, which told analysts earlier this month that economic turmoil in Asia and Russia would hurt profits.
Nortel's stock has slipped steadily since the Canadian company agreed in June to buy data networking firm Bay Networks. That deal closed in August. The stock also fell when Nortel said earlier this month it would cut 3,500 jobs, or nearly 4 percent of its global workforce.
The shares now trade at almost half of their 52-week high of $69.25.
Reuters contributed to this report.
