Canadian equipment supplier Nortel Networks [NYSE: NT] has surprised analysts with a return to profit for the first quarter of 2003, driven by a series of cost cuts and a USD190 million boost from discontinued operations. Profit for the first-quarter reached USD54 million – 1 cent a share – compared with a loss of USD841 million in the same period of last year. Despite the increase in Nortel’s bottom line, the vendor said that customers were continuing to spend ‘cautiously’ and warned that the overall telecoms equipment market would still be down significantly on 2002. Nortel’s revenue fell to USD2.4 billion for the three month period, from USD2.91 billion the previous year. During 2002 it slashed around two thirds of its workforce, 65,000 jobs, as part of its restructuring scheme and has managed to keep its head above water as a result. The company said it would no longer provide pro-forma earnings.