Here is the MOT article that says earnings should be strong, then why is the stock going down. .68 is sure a lot to expect.
----------------------------------------------------------------------
Friday January 9, 3:25 pm Eastern Time
Motorola Q4 EPS seen higher amid Asia woes
By Susan Nadeau
CHICAGO, Jan 9 (Reuters) - Technology giant Motorola Inc is expected to report 1997 fourth quarter earnings significantly higher than 1996 but amid concerns that the
economic turmoil in Asia may be slowing growth.
''Southeast Asia just stays in the headlines, and I think you're generally looking at slower growth there,'' said Robert Wilkes, an analyst with Brown Bros Harriman, adding that
various analysts' estimates have been cut in recent weeks in anticipation of the weakness.
According to First Call, the consensus of analysts' fourth quarter earnings estimates is $0.68 a share versus $0.39 earned in 1996. The range was $0.61 to $0.74. Motorola is
expected to report earnings on Monday after the market closes.
Motorola declined comment citing company policy.
About 58 percent of Motorola's overall revenues were from international customers in 1996, with China and Hong Kong accounting for 11 percent, Asia-Pacific 10 and Japan
seven.
Analysts said they expect the recovering semicondutor sector was a main driver behind growth in the fourth quarter, but cautioned the industry could be adversely affected by
the recent currency troubles, especially in the Pacific Rim.
''Semiconductors have been steadily improving,'' said Eric Buck, an analyst with Donaldson Lufkin & Jenrette. ''We expect improvement in both revenue and profitability.''
The company also apparently sees semiconductors as a key area for 1998, analysts said, as it recently announced it will spend $3 billion, the largest single initial investment in
the company's history, to go ahead on previously delayed plans for the first phase of a semiconductor plant in Virginia.
In addition, Siemens AG (OTC BB:SMAWY - news; SIEG.F) and Motorola plan to develop new chip technology in Dresden, Germany. Details of the deal are also expected
on Monday. The companies are planning a pilot production plant to make chips on 300-millimeter disks instead of the 200 used today, significantly cutting costs.
Analysts said, however, they await Motorola's semiconductor industry-wide growth forecast, expecting the company to pull it down from the 15 to 17 percent growth
previously cited.
Pagers and cell phones still remain areas of concern, both hit by stiff competition and pricing pressures in key U.S. and international markets.
''It sounds like the pager market is going to continue to be a drag and is not going to be a significant driver for a couple of quarters,'' said Lehman Bros analysts Todd
Koffman.
One growth area to watch, analysts said, is flat panel displays (for example the screens used on laptop computers), which Motorola expects to begin shipping in the second
quarter of 1998. Another area of interest is that of satellite communications systems like Iridium, a consortium of Iridium World Communications Ltd (Nasdaq:IRIDF -
news), Motorola and other interests.
Under the lead of Chief Executive Chris Galvin, who has just completed his first year at the helm, the company has divested underperforming businesses and promised to
focus on key growth areas. And analysts, who applaud Galvin's moves, said there will likely be more changes to come in 1998. |
