Alruss, I guess its time to buy some more calls :-) <<Instead, I have been rolling Nokia calls for the last 2 years, for 6 figure US$ gain. Best time to buy is when MOT warns again!>>
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NEW YORK (CNNfn) - Motorola Inc., citing deteriorating demand for its semiconductors, Thursday said it plans to slash 15,000 jobs and take a $2 billion restructuring charge(@50 market cap is ~ 30B, so 6.5%) in the second quarter.
The cuts, which represent about 10 percent of the company's worldwide work force, are scheduled to take place over the next 12 months.
The Schaumberg, Ill.-based company also warned it would post an unspecified operating loss for the quarter, making the results substantially worse than last year when the company posted a profit of $268 million, or 44 cents a share.
Analysts surveyed by First Call had been predicting a profit of 20 cents a share for the second quarter.
Wall Street reacted negatively to the news, sending Motorola (MOT) shares down 2-1/2 in after-hours trading from its New York close of 51-1/2.
Motorola, which makes semiconductors, cell phones, pagers and a variety of communications products, attributed the moves to pricing pressures and weakness in Asian markets.
"In the fourth quarter of last year our forecast for 1998 called for higher sales growth and improved profitability, but that has not materialized," Robert Growney, president and chief operating officer said in a statement.
"It is clearly time to accelerate the implementation of our renewal plan. We are determined to return our financial results to an acceptable level as soon as possible," he said.
In addition to the job cuts, Motorola said it would consolidate manufacturing plants company-wide. The consolidations will especially affect the semiconductor products, messaging, information and media units.
The company also warned it would exit "non-strategic, poorly performing" businesses and write down the value of certain assets.
Christopher B. Galvin, Motorola's chief executive officer, said the company will continue investing in initiatives with long-term growth opportunities.
"While we very much regret the impact this will have on certain employees, we must adjust our production capacity to the reality of current business conditions and reduce costs to improve overall financial performance," Galvin said |
