Nortel Networks, the Canadian equipment maker that filed for bankruptcy protection in January, reported a 37 percent fall in first-quarter revenue and a widening net loss but declared a slight increase in its cash balance, leading to speculation the vendor has time to hold out for the best sale prices for its assets. Revenues in the first-quarter came in at US$1.73 billion, compared to US$2.76 billion the year previous, whilst its net loss widened to US$507 million from US$138 million. “First quarter results showed a decline in revenue and margins as expected due to the severe economic downturn and our filings for creditor protection,” said CEO Mike Zafirovski in a statement. “However, despite the declines we saw this quarter, revenue has stabilised and our cash balance is stable from year-end 2008.”

In fact, Nortel’s cash balance at the end of the first quarter of 2009 was US$2.48 billion, up slightly from US$2.4 billion at the end of the fourth-quarter of 2008. Although Nortel earlier this year said it hoped to emerge from bankruptcy protection before mid-year as “a leaner and more competitive company,” under bankruptcy law Nortel must seek the most value for its creditors, which could mean breaking the company apart if suitable buyers are found. Nokia Siemens Networks and Avaya have been linked to potential purchases of its mobile and enterprise assets, respectively. In its financial results statement yesterday, Zafirovski confirmed that “discussions are taking place with various external parties, however, decisions have not been taken and we continue to evaluate our restructuring alternatives.” According to a Wall Street Journal report, Nortel has already declined a number of bids, deeming them to be too low. The company has also been linked to a sale of its 50 percent stake in its South Korean joint venture with LG Electronics. Such a move would be unsurprising in light of performance at the unit; it experienced a 66 percent fall in revenue year-on-year during the first-quarter of 2009. Nortel’s stock fell CAD0.05 to CAD0.25 on the Toronto Stock Exchange yesterday afternoon. The stock has dropped 97 percent in the past year.