Motorola confirms SEC inquiry

The US Securities and Exchange Commission (SEC) is making an informal inquiry into why a number of analysts recently revised their earnings estimates down for Motorola Inc., the company confirmed Friday.

"The Securities and Exchange Commission has made an informal inquiry, and we are cooperating with them," said Motorola spokesperson Scott Wyman.

Various media reports on Thursday and Friday said that SEC is looking into suspected violations of Regulation Fair Disclosure, a law that went into effect in October and which seeks to prevent companies from revealing information to analysts that could affect their stock price. All announcements on a public company's earnings and forecasts must be made to the public at the same time it's disclosed to analysts.

When asked if it was Motorola employees who had made the calls to analysts that led the analysts to revise their earnings estimates, Wyman said: "Not that I'm aware of." Employees from the investor relations department speak with analysts regularly, Wyman said. "But we don't believe there has been any violation of the full disclosure rule," he added.

"The key point here is that Motorola has not issued nor discussed any new information in addition to what we said on February 23," Wyman said.

On February 27, a group of analysts polled by First Call/Thomson Financial predicted a loss of US$0.04 per share for Motorola's first quarter. Then, on March 8, analysts again revised their estimates down to a loss of $0.05, on March 9 to a loss of $0.06 and on March 10 to a loss of $0.07 according to First Call/Thomson Financial. This is a long way down from the estimated $0.12 earnings per share that both Motorola and analysts had estimated before the company issued a profit warning on February 23. Motorola has since then announced severe job cuts. Motorola will announce its first quarter earnings on April 10.

"We have no comment," said Carol Patterson, public affairs specialist at SEC when asked about the current inquiry. "As a rule, we don't comment on specific individuals or companies," she added.

Motorola, based in Schaumburg, Illinois, can be reached at +1-847-576-5000 or via the Internet at

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