Motorola Expects Lower Than Anticipated Fourth Quarter (-35%) Sales and Earnings
Business Editors/High-Tech Writers
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Dec. 7, 2000--Motorola, Inc.
(NYSE:MOT) today announced that it does not expect to achieve its
earlier guidance for sales and earnings in the fourth quarter of 2000.
Operating profits will not meet earlier guidance in the
Semiconductor and Personal Communications segments. Operating profits
in the company's Personal Communications Segment are being adversely
affected by delays in achieving expected cost reductions in wireless
phone production, the company said. In addition, slowing market
conditions in the worldwide semiconductor industry, believed to be due
to inventory adjustments by customers, are adversely affecting the
sales and operating profits of the company's Semiconductor Products
Segment.
Sales for the fourth quarter of 2000 are now expected to be $10
billion and earnings per share are now expected to be 15 cents. The
earlier guidance given in October was sales of $10.5 billion and
earnings per share of 27 cents. Sales in the first quarter of 2001 are
currently expected to be $8.8 billion and earnings per share to be 12
cents. These estimates exclude special items.
Motorola said it is completing its normal planning process for the
upcoming year and intends to provide sales and earnings per share
guidance for the full year 2001 when it announces its final results
for the current year, in accordance with its normal practice. The
guidance is expected to be lower than the estimates given in October
of $44 billion in sales and earnings per share of $1.20.
Motorola began implementing various new cost reduction actions in
the third quarter of 2000, which are being followed by additional
actions in the fourth quarter of 2000 and will continue in the first
quarter of 2001. These actions, which include consolidation of
manufacturing operations and out-sourcing of manufacturing, will
result in charges against earnings, to be reported as special items,
in the fourth quarter of 2000, as well as in the first quarter of
2001. The company also will report gains from the sale of securities
in the fourth quarter of 2000.
Motorola continues to expect robust growth in the global wireless
telephone market, with unit sales in the range of 525-575 million in
2001, up from an estimated 420 million units this year, and expects to
fully participate in that growth. The company also believes that the
beneficial impact of cost reductions in its product portfolio of
wireless telephones will also be evident by mid-year 2001. The company
also believes that the inventory adjustments by semiconductor
customers should be completed by mid-year 2001.
Robert L. Growney, president and chief operating officer, said,
"Even though it is necessary to reduce our expectations for sales and
earnings in the short term, we continue to believe that tremendous
long-term opportunity exists at three levels of the value chain -
embedded chips, embedded electronic systems and end-to-end integrated
communication solutions -- for wireless, broadband and Internet
markets. This is the core of our strategic focus."
Motorola senior management will conduct an analyst conference call
today at 9.a.m Eastern time, 8 a.m. Central time. A live audio webcast
will be available at www.motorola.com/investor. A recording of the
call will be available on the website and for replay at
1-402-220-0071.
Motorola, Inc. (NYSE:MOT) is a global leader in providing
integrated communications and embedded electronic solutions. Sales in
1999 were $33.1 billion.
Business Risks:
Statements about sales and earnings, cost reduction actions and
the impact thereof, unit sales of wireless telephones, and growth in
the semiconductor industry are forward-looking and involve risks and
uncertainties. The company wishes to caution the reader that the
factors below and those on pages F-25 through F-28 of the appendix of
Motorola's Proxy Statement for the 2000 annual meeting of stockholders
and in our other SEC filings could cause Motorola's actual results to
differ materially from those stated in the forward-looking statements.
These factors include: (i) the ability of the company to implement its
cost reductions in a timely manner and the success of those actions;
(ii) worsening market conditions in the company's semiconductor
markets; (iii) the impact that lower than anticipated demand worldwide
for cellular telephones will have on the company's performance; and
(iv) the impact of foreign currency fluctuations on the company,
including the impact of the weakening Euro.
--30--vs/cgo*
CONTACT: Motorola, Inc.
George Grimsrud, 847/576-2346
KEYWORD: ILLINOIS
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS HARDWARE
TELECOMMUNICATIONS CONFERENCE CALLS EARNINGS
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