Nortel Networks, the giant Canadian telecoms firm which has suffered agonies during the hi-tech slump, has posted yet another heavy loss.

The company lost US$697m (£432m) in the three months to end-June, an improvement on the dramatic $19.4bn quarterly loss a year earlier.

Nortel's latest loss matched analysts' estimates, but the firm warned that more trouble could be around the corner, as demand for telecoms equipment remained feeble.

Nortel has already halved staff levels as telecom spending falls, and still insists it should break even within the next 12 months.

Still hoping

The firm said, however, that it would "actively review" its break-even target of $3.2bn in quarterly sales, and "redirect" unwarranted costs.

In the second quarter, its revenues tumbled 40% to $2.8bn.

Nortel expects further cost-cuts this year, but has not yet unveiled any fresh job losses.

In May, the firm said it would slash another 3,500 jobs by September, reducing its workforce to 42,000.

It also said it might sell or close its fiber-optic components unit.