Motorola reports Q1 loss, cites global slowdown

As had been widely predicted, Motorola Inc. on Tuesday reported its first operating loss in 15 years for its first fiscal quarter, blaming for the most part a worldwide slowdown in IT spending that has affected the high-tech sector as a whole.

Including pro forma adjustments, Motorola reported a first-quarter loss of $206 million, or $0.09 per share, compared with earnings of $481 million, or $0.21 cents per share, in the first quarter of fiscal 2000. Revenue for the period, which ended March 31, was $7.8 billion, down from $8.8 billion a year ago, Motorola said in a statement.

Wall Street analysts had expected the company to report a loss of $0.07 per share, according to the consensus estimate of 24 brokers polled by First Call/Thomson Financial. Estimates from those analysts varied widely, however, ranging from a loss per-share of $0.01 to a loss of $0.14.

"Although cash flow from businesses, including net proceeds from investments, was positive in the first quarter, this quarter was a difficult one," Robert Growney, Motorola's president and chief operating officer, said in the statement.

Growth in orders weakened across all of Motorola's business segments, he said.

"We believe this change in customer requirements is part of a major global pattern affecting many technology companies. In response to this environment, substantial cost- reduction activities continue," he said.

Excluding pro forma adjustments, Motorola's loss for the first quarter was $533 million or $0.24 per share, compared with earnings of $448 million or $0.20 cents per share in the first quarter of 2000. Most of the adjustments related to cost-reduction activities and changes to Motorola's product portfolio, the company said.

The earnings report arrives at a troubled time for the Schaumburg, Illinois-based company. Motorola has been hit by slowing demand for its phone handsets and semiconductor products, as well as by the general slowdown in the U.S. economy. Since December it has said it will lay off more than 22,000 employees, reducing capital expenditures markedly. Just last Friday it was forced to deny a report that it might soon face liquidity problems because of outstanding short-term debts. The report, issued by Chicago-based research company Gimme Credit, suggested Motorola may have trouble raising money to cover those debts. Motorola issued a statement Friday in which it rejected the concerns, saying they are incorrect and unsupported by facts.

Motorola's shares [MOT] on the New York Stock Exchange finished Tuesday's regular trading at $12.97, up 12.78 percent from Monday's close but still well off its 52-week high of $52.65.

Join the newsletter!

Error: Please check your email address.

More about First CallMotorolaThomson FinancialWall Street

Show Comments

Market Place