The fourth quarter was a mixed bag for financially troubled Canadian gearmaker Nortel Networks Corp., with revenues down compared to the past year, but an improvement compared to the previous quarter.

Even as other companies issue their first-quarter 2005 earnings, the Ontario-based equipment maker posted its fourth quarter 2004 and year-end results in part as a status update as allowed by the Ontario Securities Commission. Nortel is under investigation by U.S. and Canadian securities authorities for possible accounting irregularities.

In the fourth quarter of 2004, Nortel posted revenues of $2.6 billion, an improvement from the $2.18 billion posted in the third quarter, but down compared to the $3.27 billion posted in the fourth quarter of 2003.

Among its segments, wireline network revenue came in at $461 million, a 22 percent uptick from the previous quarter, but a 19 percent drop compared to the fourth quarter of 2003. Optical network revenues totaled $226 million, a 46 percent upswing from the third quarter, but a 28 percent decline compared to the same quarter in 2003.

Earnings followed a similar pattern, coming it at $133 million for the quarter. That is a significant drop compared to the $528 million posted in the same quarter of 2003, but better than the $259 million loss posted in the third quarter of 2004.

The fourth quarter earnings include $37 million in income from discontinued operations and $134 million in customer financing and recovery from settlements, but was offset somewhat by $81 million in restructuring charges.

The quarter did show solid performance for Nortel's core businesses, despite its recent challenges, according to Vice Chairman and CEO Bill Owens.

"In the past year, we've stabilized the business and laid the groundwork to move forward with velocity," he said, in a release. "We've taken steps to ensure ethics, integrity and transparency in our financial reporting, strengthened our world-class leadership team by recruiting new talent, and are speeding solutions to market through a partnerships and alliances strategy, while focusing on emerging markets and opportunities."

For the year, Nortel posted revenues of $9.83 billion, down from $10.19 billion in 2003. It posted a net $51 million net loss for 2004, compared to a $434 million profit posted in 2003.

Going forward, Nortel plans to capitalize on its lineup of next-generation products and on high-growth Asian markets, as well as new verticals in federal government, security and services, Owen said in a release. Nortel is projecting 40 to 44 percent revenue growth for 2005, with modest revenue growth expected in the first quarter.