You know when you head back to Smallville for the high school reunion and you run into Billy Bob, the guy who led your football team to the regionals, but now he runs the mower rental place -- not that there's anything wrong with that -- and he's wearing the same clothes he wore in high school, driving the same Camaro, sporting the same mullet ... ?

And you think, "He's fine, he's doing OK, but he's really not the life of the party anymore. Why doesn't he know it?"

That's how I feel about Nortel (NYSE:NT). This former tech darling, champion of the famous middle-finger chart, turned in disappointing earnings yet again with a Q1 bottom-line loss of $0.04 per share, worse than the restated $0.02-per-share loss for last year and worse still than the $0.01 loss predicted by the 29 Street watchers whose estimates are averaged at Yahoo! Finance. Revenues were flattish, dropping slightly to $2.38 billion.

I'll begin the touchy-feely portion of this piece by noting that when the first quotation from the top of the earnings release reads, "I am pleased to be current in our financial reporting," you know the brass is really out of ideas. Nortel, as you may remember, is just finishing (we should all hope) its restatements that go back some time to just before dinosaurs dragged their wet bellies onto dry land.

This situation has cynics like me wondering whether this company can ever do anything right, while more optimistic (or maybe just savvier junk-pickers) are looking forward to a return to profitability. With the worst behind it (it seems), is Nortel ready to resume the run to glory?

Hello? Mullet guy? I just don't believe it. I think the glory days are gone for good here. The main problem is that people don't believe anymore what they used to believe in the past, which was the story of a never-ending demand for networking gear. Even when times are good for the sector, there are lots of other companies doing the same kinds of cool things. You've got your Cisco (NASDAQ:CSCO), your Avaya (NYSE:AV), and your JuniperNetworks (NASDAQ:JNPR), not to mention little guys with nifty ideas.

The margin story this quarter is key. Gross margin dropped 4 percentage points. You might want to buy some of that "product mix" excuse, but given the slumping sales overall, I'm going to lean more on the "pricing pressures" explanation. Couple that with an outlook that highlights "high-single-digit growth" and only minor improvement in the margins, and I don't see any reason to buy into this broken dream.

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Seth Jayson wishes he had enough hair to work on a mullet. At the time of publication, he had no positions in any company mentioned here. View his stock holdings and Fool profile here. Fool rules are here.