MOT--Motorola on Target
By Tally Goldstein
10/10/00 6:36 PM ET
Motorola (MOT:NYSE - news) this evening posted third-quarter earnings and operating margins that were both in line with analysts' expectations.
The company's earnings of 26 cents a share were on target with a First Call/Thomson Financial survey of 25 analysts. (See related story.) The company reported sales of $9.5 billion, compared with sales of $8.1 billion a year earlier.
In after-hours trading, Motorola shares were up 12 cents to $26.50. The shares had closed on the New York Stock Exchange today at $26.38, down $0.63 or 2.3% on the day.
Motorola showed, as promised, a sequential improvement in operating margins in its mobile-phone division, which accounts for 36% of overall sales. The company, which also manufacturers components for wireless networks, is the world's third-largest mobile-phone manufacturer after rivals Nokia (NOK:NYSE ADR - news) and Ericsson (ERICY:NYSE ADR - news).
Motorola's operating margin of 6% landed smack in the middle of analysts' predictions of between 5.5% and 6.5% this quarter.
Ed Snyder, an analyst with Chase H&Q , says he expects the company to post a fourth-quarter-average and year-end operating margin of 8% and 10%, respectively.
Third-quarter revenue from the mobile-phone division was $3.2 billion, compared with expectations of $3.5 billion. This was down $100 million compared with the previous quarter, but up 4% compared with the third quarter of last year. The falloff occurred because after the second quarter of this year, Motorola discontinued the sale of older handsets and prepared to introduce newer models this quarter.
Chase H&Q's Snyder adds that Motorola's beleagured share price, which is hovering near its 52-week low, "could be poised for a pop because expectations are so low."
Motorola is expected to hold a conference call Wednesday morning to speak with analysts about the results. |
