Motorola 1st-Qtr Rises 20%, Chips, Phones Recover (Update1)
Bloomberg News
April 13, 1999, 3:24 p.m. PT
Motorola 1st-Qtr Rises 20%, Chips, Phones Recover (Update1)
(Adds details, company quote.)
Schaumburg, Illinois, April 13 (Bloomberg) -- Motorola Inc.,
the world's No. 2 maker of cellular phones, said first-quarter
profit rose 20 percent, beating expectations, helped by cost cuts
and improved sales of new mobile phones and semiconductors.
Profit from operations rose to $171 million, or 28 cents a
share, from $142 million, or 23 cents, in the year-earlier
period. The company was expected to earn 24 cents, the average
estimate of analysts surveyed by First Call Corp. Sales climbed 5
percent to $7.23 billion from $6.89 billion.
Motorola, also the No. 3 computer-chip maker, got a boost
from demand for new versions of its StarTAC mobile phones. The
semiconductor division was profitable for the first time in five
quarters. Motorola expects the improvements to continue this
quarter, helping the company top sales and earnings forecasts.
''Their restructuring is ahead of plan and semiconductors
and cellular are doing better than expected,'' said Mona Eraiba,
a Gruntal & Co. analyst, who rates Motorola a ''strong buy.''
Schaumburg, Illinois-based Motorola rose 1 3/8 to 83 15/16
before the earnings report. Shares have gained about 36 percent
this year and are approaching a record 89 15/16 set in July 1997.
Restructuring
Motorola said it has completed most of the job cuts it began
last year, ahead of schedule. In January, the company said that
it would cut 22,500 jobs, or 15 percent of its workforce, by the
middle of the year.
Sales in the cellular-phone division rose 8 percent to $2.6
billion and orders were 16 percent higher.
''Sales of digital wireless telephones increased very
significantly, while sales of analog wireless telephones were
significantly lower,'' the company said in a statement.
Still the company said it's premature for analysts to boost
full-year 1999 earnings estimates.
''Weak economic conditions in some regions of the world will
continue to affect our rate of growth,'' Chief Executive
Christopher Galvin said in a statement.
The company said special items had no net impact on earnings
in the recent quarter.
Including pretax gains of $54 million, or 7 cents a share
after tax in the year-ago quarter, net income was $180 million,
or 30 cents a share.
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