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NEW YORK -(Dow Jones)- Shares of Glenayre Technologies Inc. fell
sharply Friday in sympathy with Motorola Inc., though the
telecommunications equipment maker downplayed the effect of Motorola's
dour third-quarter outlook on its operations.
Motorola (MOT) late Thursday said shutting a computer-cloning
operation and weakness in the world paging market would drive
third-quarter earnings "significantly lower" than analysts' forecasts.
The semiconductor and telecommunications giant Friday repeated the
outlook, and added that a review of underperforming business might
result in additional charges against third- and fourth-quarter results.
Problems with Motorola's paging operations have caused investors to
worry about Glenayre, a Charlotte, N.C. company that builds the
infrastructure for the paging industry.
However, Glenayre Chief Financial Officer Stanley Ciepcielinski said
Motorola had a conference call and told analysts the downturn in China
and tight inventories in the U.S. weren't long-term trends. Those
problems won't hurt infrastructure build-up if they are not long-term,
Ciepcielinski said.
Legg Mason Wood Walker analyst Bradley Williams said Motorola was
experiencing an "inventory and volatility issue," and the company had
made little or no reference to infrastructure. Williams added that
market players already had "conservative" growth expectations for
Glenayre, somewhere between 10% and 15%.
Ciepcielinski declined to comment about earnings or revenue
expectations, but analysts surveyed by First Call have a mean estimate
of 24 cents a share for the third quarter and 95 cents a share for 1997.
At early afternoon, Glenayre (GEMS) shares were down $1, or 6.2%, at
$15.125 on Nasdaq volume of 2.5 million, compared with average daily
volume of 900,000. The stock had traded as low as $14.25 earlier.
Copyright (c) 1997 Dow Jones & Company, Inc.
All Rights Reserved.
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