Nortel CEO Mike Zafirovski said in a statement Friday that Nortel's third restatement of financial results in recent years was "unfortunate, but the right thing to do."

Nortel described the need for the restatements of results for 2003, 2004 and part of 2005 "primarily due to revenue incorrectly recognized in prior periods that should have been deferred to future periods." The restatement will be issued in April.

Ford is not only the INNUA president, but his job is also affected by the performance of Nortel products, which he said has been good. He oversees three campus voice networks running entirely on Nortel gear and is slowly introducing voice over IP phones, with 400 installed out of 3,000.

One IT manager at another big Nortel user, The Burlington Northern and Santa Fe Railway Co. in Fort Worth, Texas, said the latest restatement should not detract from Nortel's strong points. "I have to believe this [restatement] is reflective of poor financial management, but does not have any adverse impact to or is reflective of Nortel's technical capability or product reliability," said Fred Gratke, assistant vice president of telecommunications at BNSF, in an e-mail.

One of the strongest of the negative analyst reactions to the restatement news came from Bill Lesieur, an analyst at Technology Business Research Inc. in Hampton, N.H. "Wow, what a mess!" he said in a statement. "Just when you think it can't get any worse for poor old Nortel, another bombshell."