Nortel (NYSE:NT) reported its Q3 2004 results, with a revenue tally of $2.179 billion (as opposed to the Street's consensus estimate of around $2.270 billion). Enterprise results were in line, whereas wireline were a bit lower and wireless a bit higher than expected. But the shortfall really came in the optical side, mostly attributed to "a cumulative correction of approximately $80 in the third quarter of 2004 for revenues previously recognized primarily in 2001 and 2002 relating to the delivery of future contractual post-contract support, or PCS, and other services.”

But going forward, if Nortel is to win back the full confidence from the Street, more transparency in the reporting of results will be required (as Lucent did after its own settlement with the SEC).  So, in the future, items such as the mysterious $159 million charge on the BSNL contract (that adversely impacted gross margins) need to be better explained.