Nortel Networks, the telecoms equipment giant that employs over 300 people in Galway, yesterday reported a fall in fourth-quarter earnings and forecast only "modest" revenue growth for the next quarter.

Shares of Ontario, Canada-based Nortel tumbled almost 7 per cent to touch a new year low of C$2.98 (€1.85) on the Toronto Stock Exchange. In New York, they fell 4.8 per cent to $2.37 (€1.84).

The company said it earned $133 million, or three cents a share, in the quarter ended December 31st, down 75 per cent from $528 million, or 12 cents a share, a year earlier.

Revenue was $2.6 billion, down from $3.27 billion in the fourth quarter of 2003.

It was about $200 million less than Nortel had forecast because the company decided to defer revenue, the company's chief financial officer, Peter Currie, told a conference call.

For all of 2004, Nortel said it lost $51 million, or one cent a share, compared with earnings of $434 million, or 10 cents a share in 2003.

Revenue for the year was $9.8 billion, down from $10.2 billion in 2003.

Analysts had expected earnings of two cents a share and revenue of $2.83 billion, in the fourth quarter.

"There were little rays of hope here and there. But costs are high for the next quarter or so. I don't think they have turned the corner," said Edward Snyder, an analyst at Charter Equity Research.

"In the meantime, investors are not waiting around," he said. - (Reuters)