Exhibit 99.1

News Release

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Nortel Reports Financial Results for the Third Quarter 2009

Financial Presentation

Financial Results

TORONTO - Nortel* Networks Corporation [OTC: NRTLQ] announced its results for the third quarter 2009. Results were prepared in accordance with United States generally accepted accounting principles (GAAP) in U.S. dollars.

Following discussions with the U.S. Securities and Exchange Commission (SEC), commencing with the quarterly report on Form 10-Q for the quarter ended September 30, 2009, Nortel will no longer combine the results of the Europe, Middle East and Africa (EMEA) subsidiaries, and entities they control (Equity Investees), with its consolidated results. Nortel has determined that, as of the Petition Date, it is appropriate to present its Equity Investees under the equity method of accounting based on the conclusion that Nortel exercises significant influence over those entities. The equity method of accounting results in the financial position and results of operations of the Equity Investees being presented net on a single line in the balance

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sheet and statement of operations, respectively, versus being combined gross into each individual line item. The comparative periods have not been recast for this change in presentation. As a result, analysis using the comparative periods may be difficult and may not provide meaningful comparisons.

The Enterprise Solutions (ES) business as well as the Nortel Government Solutions (NGS) and DiamondWare businesses are presented as discontinued operations for the quarter ended September 30, 2009. Accordingly, comparative periods have been recast to give effect for the change in presentation.

The CDMA business did not qualify for treatment as discontinued operations and as a result has been included in continuing operations.

Except in the Segment Revenues section, the discussion below relates to Results from Continuing Operations under U.S. GAAP and excludes the financial results of the Equity Investees.

Consistent with the way we manage our business segments, the financial information in the Segment Revenues section includes the results of the Equity Investees within each segment. Therefore, in order to reconcile the financial information for the business segments discussed below to our consolidated financial information, the net financial results of the Equity Investee must be removed.

Third Quarter 2009 Financial Summary

Nortel’s overall financial performance in the third quarter of 2009 continued to be impacted by ongoing negative economic conditions and the uncertainty created by the Company’s Creditor Protection Proceedings, which resulted in a decrease in customers’ spending levels.

Segment Revenues

The financial information for our business segments includes the results of the Equity Investees as if they were consolidated, which is consistent with the way we manage our business segments, but does not include the results of discontinued operations. Commencing with the third quarter of 2009, Nortel is reporting its CVAS business unit as a separate reportable segment. Prior to that time, the results of CVAS were included

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in the Wireless Networks (WN) reportable segment, which prior to the third quarter of 2009 was called the Carrier Networks (CN) reportable segment.

Segment revenues were $1,271 million for the third quarter of 2009 compared to $1,595 million for the third quarter of 2008, reflecting a reduction of 20% percent due to declines across all business segments, except CVAS. The reduction was primarily a result of the continuing economic downturn and the uncertainty created by the Creditor Protection Proceedings.

Segment Revenues B/(W)

* Includes revenues related to Equity Investees

WN revenues in the third quarter of 2009 were $663 million, a decrease of 18% percent compared with the year ago quarter with declines in the GSM and UMTS solutions business, while the CDMA solutions business was essentially flat. The wireless segment was negatively impacted by a reduction in spending by certain customers as a result of their change in technology migration plans.

CVAS revenues in the third quarter of 2009 were $208 million, an increase of 14% percent compared with the year ago quarter due to contract deliveries and project completions in the third quarter of 2009.

Metro Ethernet Networks (MEN) revenues in the third quarter of 2009 were $295 million, a decrease of 26% percent compared with the year ago quarter with impacts across all businesses. In addition to the factors above, lower revenues from certain customers also impacted the year over year decline.

LG-Nortel Co. Ltd. (LGN) revenues in the third quarter of 2009 were $103 million, a decrease of 51% percent compared with the year ago quarter. In addition to the factors described above, a majority of the decline was in LGN Carrier, primarily due to the recognition of certain deferred revenues in the third quarter of 2008 not repeated in the third quarter of 2009 and higher sales volumes related to our 3G wireless products in the third quarter of 2008, as well as the impact of foreign exchange fluctuations. The decrease was partially offset by network upgrades related to certain customers and an increase in wireless local loop sales in the third quarter of 2009.

Discontinued operations revenues in the third quarter of 2009 were $475 million, a decrease of 34% percent compared with the year ago quarter. In addition to the factors above, Asia and Canada revenues were also unfavorably impacted by foreign exchange fluctuations.

Gross Margin

Gross margin was 45.0 percent of revenues in the third quarter of 2009. Excluding charges related to workforce and other cost reduction activities and pension curtailment losses that historically would have been recorded in special charges, gross margin in the third quarter of 2009 would have been 47 percent ^(a) of revenues. This compared to gross margin of 38.2 percent for the third quarter of 2008. Compared to the third quarter of 2008, in addition to the items already noted, gross margin increased primarily as a result of the exclusion of the Equity Investees, which positively impacted gross margin by 5.7 percentage points, the favorable impacts of product mix and the favorable impact of foreign exchange fluctuations and price erosion, and a decrease in warranty costs.

Operating Expenses

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Operating Expenses B/(W)

A focus on reducing costs resulted in lower operating expenses compared to the year ago quarter. Operating expenses were $339 million in the third quarter of 2009. This compares to operating expenses of $541 million for the third quarter of 2008.

SG&A expenses were $155 million in the third quarter of 2009, compared to $272 million for the third quarter of 2008. Excluding charges related to workforce and other cost reduction activities and pension curtailment losses that historically would have been recorded in special charges, SG&A expenses for the third quarter of 2009 would have been $123 million ^(a). SG&A expense in the third quarter of 2009 also excludes $129 million related to Equity Investees. Compared to the third quarter of 2008, in addition to the items already noted, SG&A was favorably impacted primarily by headcount reductions and lower spending levels across all categories including a reduction in sales and marketing investment in maturing technologies.

R&D expenses were $184 million in the third quarter of 2009, compared to $269 million for the third quarter of 2008. Excluding charges related to workforce and other cost reduction activities and pension curtailment losses that historically would have been recorded in special charges, R&D expenses for the third quarter of 2009 would have been $164 million ^(a). R&D expense in the third quarter of 2009 also excludes $37 million related to Equity Investees. Compared to the third quarter of 2008, in addition to the items already noted, R&D was favorably impacted primarily by headcount reductions and the cancellation of certain R&D programs.

Net Loss

The Company reported a net loss in the third quarter of 2009 of $508 million compared to net loss of $3,413 million in the third quarter of 2008.

The net loss in the third quarter of 2009 of $508 million included a loss from discontinued operations of $164 million, reorganization costs of $223 million primarily related to the recording of a pension liability, interest expense of $75 million, other charges of $46 million, comprised in part by pension curtailment expense and break-up fees in relation to the CDMA and LTE Access Asset sale, $10 million in income tax expense and an expense of $3 million for earnings attributable to non-controlling interests (formerly minority interests), partially offset by Other income – net of $60 million, comprised in part of a currency exchange gains of $61 million.

The net loss in the third quarter of 2008 of $3,413 million included $2,133 million in income tax expense, a goodwill impairment charge of $661, loss from discontinued operations of $556, interest expense of $81 million, special charges of $41 million for headcount and other cost reduction activities, an expense of $21 million for earnings attributable to non-controlling interests (formerly minority interests) and Other expense-net of $14 million, comprised primarily of a gain of $8 million due to changes in foreign exchange rates and a loss of $4 million from mark-to-market gains on interest rate swaps.

Cash

Consolidated cash balance as of September 30, 2009 was $1.81 billion and excluded Equity Investees cash of $798 million. The consolidated cash balance plus Equity Investees cash exceeded the June 30, 2009 consolidated cash balance of $2.56 billion, which included Equity Investees cash of $819 million. The decrease in the consolidated cash balance was primarily due to the deconsolidation of the Equity Investees, cash used in investing activities of $50 million, mainly due to changes in restricted cash and cash used in financing activities of $2 million, partially offset by cash from operating activities of $124 million and net favorable foreign exchange impacts of $41 million.

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* * * * * *

(a) Each of Gross Margin, SG&A Expense and R&D Expense, excluding the impact of charges in relation to headcount and other cost reduction activities and pension curtailment losses that historically would have been recorded in special charges, are non-GAAP measures. Nortel’s management believes that these measures are meaningful measurements of operating performance and provides greater transparency to investors with respect to Nortel’s performance and supplemental information used by management in its financial and operational decision making. These non-GAAP measures may also facilitate comparisons to Nortel’s historical performance and competitors’ operating results. These non-GAAP measures should be considered in addition to, but not as a substitute for, the information contained in Nortel’s financial statements prepared in accordance with GAAP. These measures may not be synonymous to similar measurement terms used by other companies.

About Nortel

For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain statements in this press release may contain words such as “could”, “expects”, “may”, “should”, “will”, “anticipates”, “believes”, “intends”, “estimates”, “targets”, “plans”, “envisions”, “seeks” and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on Nortel’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. Nortel’s assumptions, although considered reasonable by Nortel at the date of this report, may prove to be inaccurate and consequently Nortel’s actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) risks and uncertainties relating to the Creditor Protection Proceedings including: (a) risks associated with Nortel’s ability to: stabilize the business and maximize the value of Nortel’s businesses; obtain required approvals and successfully consummate pending and future divestitures; ability to satisfy transition services agreement obligations in connection with divestiture of operations; successfully conclude ongoing discussions for the sale of Nortel’s other assets or businesses; develop, obtain required approvals for, and implement a court approved plan; resolve ongoing issues with creditors and other third parties whose interests may differ from Nortel’s; generate cash from operations and maintain adequate cash on hand in each of its jurisdictions to fund operations within the jurisdiction during the Creditor Protection Proceedings; access the EDC Facility given the current discretionary nature of the facility, or arrange for alternative funding; if necessary, arrange for sufficient debtor-in-possession or other financing; continue to have cash management arrangements and obtain any further required approvals from the Canadian Monitor, the U.K. Administrators, the French Administrator, the Israeli Administrators, the U.S. Creditors’ Committee, or other third parties; raise capital to satisfy claims, including Nortel’s ability to sell assets to satisfy claims against Nortel; maintain R&D investments; realize full or fair value for any assets or business that are divested; utilize net operating loss carryforwards and certain other tax attributes in the future; avoid the substantive consolidation of NNI’s assets and liabilities with those of one or more other U.S. Debtors; attract and retain customers or avoid reduction in, or delay or suspension of, customer orders as a result of the uncertainty caused by the Creditor Protection Proceedings; maintain market share, as competitors move to capitalize on customer concerns; operate Nortel’s business effectively in consultation with the Canadian Monitor, and the U.S. Creditors’ Committee and work effectively with the U.K. Administrators, French Administrator and Israeli Administrators in their respective administration of the EMEA businesses subject to the Creditor Protection Proceedings; continue as a going concern; actively and adequately communicate on and respond to events, media and rumors associated with the Creditor Protection Proceedings that could adversely affect Nortel’s relationships with customers, suppliers, partners and employees; retain and incentivize key employees and attract new employees as may be needed; retain, or if necessary, replace major suppliers on acceptable terms and avoid disruptions in Nortel’s supply chain; maintain current relationships with reseller partners, joint venture partners and strategic alliance partners; obtain court orders or approvals with respect to motions filed from time to time; resolve claims made against Nortel in connection with the Creditor Protection Proceedings for amounts not exceeding Nortel’s recorded liabilities subject to compromise; prevent third parties from obtaining court orders or approvals that are contrary to Nortel’s interests; reject, repudiate or terminate contracts; and (b) risks and uncertainties associated with: limitations on actions against any Debtor during the Creditor Protection Proceedings; the values, if any, that will be prescribed pursuant to any court approved plan to outstanding Nortel securities and, in particular, that Nortel does not expect that any value will be prescribed to the NNC common shares or the NNL preferred shares in any such plan; the delisting of NNC common shares from the NYSE; and the delisting of NNC common shares and NNL preferred shares from the TSX; and (ii) risks and uncertainties relating to Nortel’s business including: the sustained economic downturn and volatile market conditions and resulting negative impact on Nortel’s business, results of operations and financial position and its ability to accurately forecast its results and cash position; cautious capital spending by customers as a result of factors including current economic uncertainties; fluctuations in foreign currency exchange rates; any requirement to make larger contributions to defined benefit plans in the future; a high level of debt, arduous or restrictive terms and conditions related to accessing certain sources of funding; the sufficiency of workforce and cost reduction initiatives; any negative developments associated with Nortel’s suppliers and contract manufacturers including Nortel’s reliance on certain suppliers for key optical networking solutions components and on one supplier for most of its manufacturing and design functions; potential penalties, damages or cancelled customer contracts from failure to meet contractual obligations including delivery and installation deadlines and any defects or errors in Nortel’s current or planned products; significant competition, competitive pricing practices, industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; any material, adverse affects on Nortel’s performance if its expectations regarding market demand for particular products prove to be wrong; potential higher operational and financial risks associated with Nortel’s international operations; a failure to protect Nortel’s intellectual property rights; any adverse legal judgments, fines, penalties or settlements related to any significant pending or future litigation actions; failure to maintain integrity of Nortel’s information systems; changes in regulation of the Internet or other regulatory changes; and Nortel’s potential inability to maintain an effective risk management strategy.

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For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note that Nortel will not be hosting a teleconference/audio webcast to discuss third quarter 2009 results.

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Statements of Operations (unaudited)

(U.S. GAAP; Millions of U.S. dollars, except per share amounts)

The comparative periods have not been recast for the change in accounting. As a result, meaningful analysis to the comparative periods may be difficult.

Accordingly, comparative periods have been recast to give effect for the change in presentation.

Statement of Operations

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Balance Sheets (unaudited)

(U.S. GAAP; Millions of U.S. dollars, except per share amounts)

Balance Sheet

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Statements of Cash Flows

(U.S. GAAP; Millions of U.S. dollars)

Cash Flows

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Consolidated Financial Information (unaudited)

(U.S. GAAP; Millions of U.S. dollars)

Segmented revenues

The following table summarizes our revenue and management operating margin by segment. The financial information for our business segments includes the results of the Equity Investees as if they were consolidated, which is consistent with the way we manage our business segments.

Segmented Revenues

Geographic revenues

The following table summarizes our geographic revenues based on the location of the customer for: