Special items push Motorola Q2 loss to $2.3B

Motorola Inc. recorded a net loss of US$2.32 billion, or $1.02 per share, for the second quarter of its fiscal year 2002, ended June 29, 2002, on quarterly revenue which fell 11 percent from the same quarter last year to $6.74 billion, the company said in a statement Tuesday.

The results announced Tuesday included special items costing a net $2.37 billion which must be included under the U.S. Generally Accepted Accounting Principles (GAAP). These items include a $1.1 billion write down of investments and other assets, and $530 million related to a loan to Turkish cellular service operator Telsim Mobil Telekomunikasyon Hizmetleri AS (Telsim Mobil), which remains in default. Motorola's net loss in 2001's second quarter was $759 million, or $0.35 per share.

Sales in the personal communications segment -- including phone handsets -- grew, but semiconductor sales fell 3 percent. The hardest hit sectors were global communications, where revenue fell 25 percent from the year-ago quarter due to lower spending by wireless operators worldwide, and broadband revenue, down 32 percent, Motorola said.

Christopher Galvin, Motorola chairman and CEO, said in a statement on Tuesday that he saw clear evidence of global economic recovery, but that those benefits were to some extent offset by investors upset with the malfeasance of certain large corporations, according to the statement.

However, the company expects to post a net profit in the third and fourth quarters, Motorola said in a statement Wednesday.

Revenue in the third and fourth quarters is expected to be $6.7 billion and $7.5 billion, respectively. Revenue in the same quarters in 2001 was $7.2 billion and $7.3 billion, according to Wednesday's statement.

In accordance with GAAP, the company expects to achieve earnings of about $0.02 per share in the third quarter and $0.10 in the fourth quarter of 2002, the company said Wednesday.

These estimated earnings include charges of about $215 million related to the company's restructuring. Excluding one-time charges, earnings per share would be $0.05 in the third quarter and $0.14 in the fourth quarter, the company said Wednesday.

Revenue for the whole of 2003 is expected to be $29 billion, with earnings of $0.45 per share, barring any unforeseen political or economic disruption, the company said Wednesday.

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