Ladies and gentlemen, boys and girls, we now have a new guru - it is none other than our very own naked Pete -gggg-
Here is a priovate message he posted to me this morning:
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To: MMV (who wrote...)
From: Pete M.
Thursday, Mar 5 1998 7:44AM EST
Mohan, I'm hoping/thinkin that a MOT warning is coming soon <g>
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And then..... this evening!
Thursday March 5, 5:48 pm Eastern Time
Company Press Release
Impact of Weakened Asian Currencies To Affect Motorola's First
Quarter Results
SCHAUMBURG, Ill.--(BUSINESS WIRE)--March 5, 1998--Motorola, Inc. said today its first quarter 1998 sales are
expected to be about the same as those for the first quarter a year ago, primarily because of the effects of weakened
Asian currencies. Earnings are expected to be well below the expectations of the investment community.
Although the Company said in January that it hoped the efforts of the International Monetary Fund and others might help
stabilize Asian consumer confidence, with the exception of China, that does not appear to have occurred. Motorola is
experiencing deflationary currency-influenced price competition coupled with traditional industry price competitiveness
and certain semiconductor industry segment slowdowns that produced weaker than expected January and February
results.
Motorola expects that the most significant contributor to the shortfall of the Company's first-quarter results will be its
Semiconductor Products Sector. The Sector's Consumer Systems Group and Components Group have been affected
by significant softness in demand in Asia and increased price pressure in most other regional semiconductor markets, as
competitors seek to maintain unit volume production and market share during this period of slower growth. More normal
growth rates and pricing are being experienced in the Sector's Networking and Computing Systems, Wireless
Subscriber Systems and Transportation Systems Groups.
Despite recent improvements in order patterns for the Company's paging business in China, order levels in Asia were
lower than normal seasonal levels prior to the advent of the Chinese New Year. This has affected first-quarter shipment
potential.
Although Motorola's Cellular Infrastructure Group is experiencing solid results in sales and orders in much of the world,
particularly in Japan and the Pan America region, there has been a significant slowing of business in those Asian countries
most affected by currency devaluations.
The Cellular Subscriber Sector continues to experience positive momentum in the sales of its digital handset products
due to its improving position in the Global System for Mobile Communications (GSM) market and its recent
introductions of new products in the Code Division Multiple Access (CDMA) and Time Division Multiple Access
(TDMA) markets. However, a weakening of demand is being felt in the United States. In addition, analog handset sales
in the U.S. are declining as a result of an accelerating trend of demand shift from analog to digital products. A
competitive pricing environment for digital handsets is developing as those manufacturers who benefit competitively from
the Asian currency devaluation put greater than historical pressure on pricing globally, but particularly in Asia.
Although the Company sees some signs of these overall economic issues abating, it is unable to forecast the specific
timing or rate of the economic recovery. Motorola remains fully committed to its long-term prospects in Asia and is
taking cost and capital spending control measures in the short term.
Business Risk: The statements contained in this announcement that are not historical, including statements about expected
sales and earnings, the competitive pricing environment for digital handsets, and the outlook for Asia are forward-looking
and involve risks and uncertainties. Factors, including the various efforts to stabilize economic conditions in Asia; the
potential that the impact of weakened currencies in Southeast Asia could spread to countries where the Company does a
sizable amount of business, including China and Japan; the impact of weakened currencies in Southeast Asia on
economies outside of Asia; the ability of Motorola's cellular businesses to continue to transition to digital technology and
successfully gain market share; and the factors in Motorola's 10/K-A on pages 14 and 15 of Item 7 and in other SEC
filings, could cause (and in some cases have caused) Motorola's results to differ materially from those stated in this
announcement.
Note: A brief conference call for the investment community will begin at 8:30 a.m., Eastern Standard Time on Friday,
March 6, 1998. Participants can access the call by dialing 973-633-1010. The call is also available to the media, but
questions will be restricted to the investment community. A taped replay of the call will be available until 5 p.m., EST, on
Monday, March 9, by dialing 402-220-9943. |
