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To: djane who wrote (5632)	7/9/1999 1:00:00 PM
From: djane	Read Replies (1) \| Respond to of 29987

Motorola Profits Seen Up, But Iridium Woes Linger (via g yahoo thread) Friday July 9 8:36 AM ET By Emily Kaiser CHICAGO (Reuters) - Motorola Inc. (NYSE:MOT - news) will likely report a sharp jump in second-quarter earnings next week, but financial troubles at Iridium World Communications Ltd (Nasdaq:IRID - news)., the global satellite telephone system Motorola helped bankroll, could temper investor enthusiasm, analysts said. ''I think it is going to be a solid quarter, with a slight upside to the (earnings estimates), mostly driven by the semiconductors,'' said Wojtek Uzdelewicz, telecommunications analyst with S.G. Cowen & Co. ''Iridium is still a problem.'' Analysts were expecting the wireless telephone and semiconductor maker to report earnings of 41 cents a share Tuesday, according to First Call Corp., the research firm that tracks earnings estimates. That would be a huge jump from last year's profit of one cent a share, which excluded one-time items. Last year's results were hit sharply by economic turmoil in Asia, which hurt demand for semiconductors and other products. A spokesman for Schaumburg, Ill.-based Motorola declined to comment on the earnings expectations, citing company policy. ''We expect solid earnings improvement in 1999, back to numbers like 1997, versus the trough in 1998,'' ABN-AMRO analyst Kenneth Leon said in a research note. ''The key drivers are restructuring, better economic conditions in Asia/Pacific, along with higher sales growth for personal communications and semiconductors.'' Earlier this week, the Semiconductor Industry Association said global May sales of semiconductors increased 11.8 percent year over year. However, several analysts said they were cautious about Motorola's near-term prospects because of concerns about the company's exposure to Iridium, which provides phone service anywhere in the world through a network of 66 satellites. Iridium has struggled to sign up subscribers and has not been able to pay its debts. The company has received three extensions on its $800 million credit facility, and several analysts said Iridium would likely default on the loan. Motorola owns 18 percent of Iridium and has guaranteed a large portion of the company's debt. Some analysts have questioned whether Motorola has reserved enough money to cover its costs should Iridium default. ''We continue to be concerned about Motorola's exposure to Iridium,'' said Mark Roberts, telecommunications analyst with Everen Securities. ''I would not be surprised to see Motorola take a fairly sizeable one-time charge to essentially write off Iridium and take reserves against any potential exposure.'' S.G. Cowen's Uzdelewicz said he did not expect Motorola to record a charge for Iridium until the satellite phone company declared bankruptcy -- something he said was inevitable. ''There is no way this thing can survive,'' he said. Shares of Motorola gained $3.31 to close at $97.94 on the New York Stock Exchange Thursday. Copyright © 1999 Reuters Limited.