Exhibit 99.1

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Nortel Reports Financial Results for the Third Quarter 2010

Financial Presentation and Q3 2010 Results

The presentation of our financial results continues to be significantly impacted by accounting conclusions resulting from developments in the creditor protection process. The third quarter loss of $649 million includes non-cash charges of approximately $490 million resulting from the remeasurement of the liabilities related to the Canadian defined benefit pension plans in conjunction with the transfer of the plans pursuant to the terms of the previously announced court-approved Settlement Agreement.

TORONTO—Nortel* Networks Corporation [OTC: NRTLQ] announced its results for the third quarter 2010. Results were prepared in accordance with United States generally accepted accounting principles (GAAP) in U.S. dollars.

As of May 31, 2010, Nortel determined that it no longer had significant influence over the operating and financial policies of the EMEA Subsidiaries primarily due to the significance of the completed business divestitures. As a result, Nortel accounted for the EMEA Subsidiaries as an investment using the cost method as of June 1, 2010. Commencing June 1, 2010, the financial results of the EMEA Subsidiaries are no longer included in Nortel’s financial results. In the context of the Creditor Protection Proceedings, Nortel continues to evaluate the method of accounting for all of its subsidiaries.

As a result of the divestitures of: (1) the Code Division Multiple Access (CDMA)/LTE Access and Enterprise Solutions (ES) businesses in the fourth quarter of 2009; (2) the Optical Networking and Carrier Ethernet, and Global System for Mobile communications (GSM)/GSM for Railways (GSM-R) businesses in the first quarter of 2010; and (3) the Carrier VoIP and Application Solutions (CVAS) business and Nortel’s interest in the LGN joint venture in the second quarter of 2010, only the residual contracts related to those businesses were included in the respective reportable segments. The MEN reportable segment also continued to include the multiservice switching products and related services (MSS) business. As announced on September 25, 2010,

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Nortel entered into asset sale agreements with Ericsson, the successful acquirer at auction, for the sale of the MSS business. Nortel and Ericsson are working toward a successful transition and closing of the transaction.

The ES and LGN businesses are presented as discontinued operations while the other residual businesses are presented as continuing operations. The discussion below relates to Results from Continuing Operations under U.S. GAAP and excludes the financial results of the EMEA Subsidiaries. As a result, the comparative segment information has been recast to reflect this change.

Financial Summary

Nortel’s overall financial performance in the third quarter of 2010 was impacted by the sale of substantially all of its businesses in prior quarters.

Segment Revenues

Segment revenues from continuing operations were $85 million in the third quarter of 2010 compared to $942 million for the third quarter of 2009, reflecting a reduction of 90.1% percent as a result of the business divestitures.

Segment Revenues B/(W)

Discontinued operations revenues from ES in the third quarter of 2010 were nil, a decrease of 100 percent compared with the year ago quarter as a result of the divestiture of the ES, NGS and DiamondWare businesses in the fourth quarter of 2009.

Gross Margin

Gross margin declined to negative 3.5 percent of revenues in the third quarter of 2010 compared to 46.1 percent for the third quarter of 2009, primarily as a result of the business divestitures. Gross margin was also impacted by the ongoing costs related to delivery of the transition services agreements, the recovery of which is recorded in other operating income.

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Operating Expenses

Operating Expenses B/(W)

A focus on reducing costs and the business divestitures resulted in lower operating expenses compared to the year ago quarter. Operating expenses were $111 million in the third quarter of 2010 compared to $314 million for the third quarter of 2009. Operating expenses were also impacted by a change in the methodology of allocating certain SG&A expenses related to corporate overhead costs to R&D expense and cost of revenues.

SG&A expense was $108 million in the third quarter of 2010, compared to $141 million for the third quarter of 2009. R&D expense was $3 million in the third quarter of 2010, compared to $173 million for the third quarter of 2009. These reductions were a result of the reasons described above.

Net Loss

The Company reported a net loss in the third quarter of 2010 of $649 million compared to a net loss of $508 million in the third quarter of 2009.

The net loss included reorganization costs of $529 million, interest expense of $77 million and other expense of $18 million, partially offset by other operating income of $94 million comprised primarily of billings under transition services agreements.

The $529 million in reorganization costs primarily related to a charge of $490 resulting from the remeasurement of liabilities related to Nortel’s Canadian defined pension plans triggered by the cessation of all future pension accruals immediately prior to the transfer of the plans to a replacement administrator appointed by the Office of the Superintendent of Financial Services pursuant to the terms of the previously announced court-approved Settlement Agreement regarding former Canadian employees. The remeasurement utilized wind-up basis assumptions resulting in a significant increase in the liabilities.

Reorganization costs also included asset impairments of $22 million and a loss of $25 million related to purchase price adjustments from business divestitures, partially offset by a recovery of $18 million related to the fair value of certain long-lived assets. Other expense of $18 million was comprised primarily of a currency exchange loss of $44 million partially offset by rental income of $21 million.

The net loss in the third quarter of 2009 of $508 million included a loss from discontinued operations of $157 million, $159 million equity in net loss of EMEA Subsidiaries, reorganization items of $224 million, and interest expense of $75 million, other expenses of $57 million, and other operating charges of $44 million.

Cash

The cash balance as of September 30, 2010 was $1.7 billion and restricted cash was $3.2 billion primarily related to the business divestiture proceeds, essentially flat from June 30, 2010. The slightly higher cash balance was primarily due to a net favorable foreign exchange impact of $12 million, cash from investing activities of $8 million and cash from operating activities of $7 million, partially offset by cash used in financing activities of $9 million primarily related to dividends paid by subsidiaries to non-controlling interests.

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As previously announced, Nortel does not expect that the Company’s common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

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About Nortel

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

About Nortel

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 press release, 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; 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 under the new organizational structure, and 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.

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 2010 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)

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)

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)

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 does not include the results of the Equity Investees, which is consistent with the way we manage our business segments.

Geographic revenues

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

Network Solutions revenues

The following table summarizes our revenue by segment. The financial information for our business segments does not include the results of the Equity Investees, which is consistent with the way we manage our business segments.