Nortel Networks, the troubled Canadian telecommunications equipment supplier, sprang another unpleasant surprise on Thursday, saying third-quarter revenues were likely to be lower than the previous three months and that revenue growth for the year would lag the overall market.

Just one month ago, Nortel projected that its 2004 revenues would outpace the rest of the market. It estimated second-quarter revenues at US$2.6bn, up from $2.5bn in the first quarter. The company is in the throes of restating financial results dating back to 2001 and has yet to produce audited reports for the first two quarters of this year.