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To: slacker711 who wrote (5339)	1/17/2000 8:39:00 PM
From: Caxton Rhodes	Read Replies (1) \| Respond to of 13582

Motorola Profits Jump, Phone Sales Strong By Emily Kaiser 1/17/00 CHICAGO (Reuters) - Motorola Inc. (NYSE:MOT - news), the world's second-largest wireless telephone maker, said on Monday its fourth-quarter profits more than tripled, topping Wall Street forecasts, on strong demand for wireless phones. The Schaumburg, Ill.-based maker of computer chips and telecommunications equipment said operating profit, excluding one-time items, rose to $514 million, or 82 cents per share, from $159 million, or 26 cents per share, in the year-earlier quarter. On average, analysts were forecasting 81 cents per share, according to First Call/Thomson Financial estimates. Ahead of the news, shares in Motorola closed Friday up 11-8/16 at 150-1/16. The U.S. stock markets were closed on Monday in observance of Martin Luther King Day. Including one-time items, Motorola's fourth-quarter profits were $349 million, or 56 cents per share. Motorola said net sales rose to $8.5 billion from $8.3 billion in the same period a year ago. ``Results were in line, a little bit light on revenues maybe, but they made it up on the operating side,' said Ed Snyder, telecommunications analyst with Hambrecht & Quist. Some analysts had been looking for revenues of closer to $8.6 billion, saying the strong market for wireless phones should have generated even higher sales. ``The company has a bit of explaining to do (in Tuesday's conference call) on the slowdown in revenue growth,' said Wojtek Uzdelewicz, telecommunications analyst with SG Cowen Securities. ``They did miss my handset (sales) projection.' Motorola said it recorded a fourth-quarter pretax charge of $740 million to increase reserves related to its financial exposure to Iridium LLC, the global satellite telephone company that Motorola bankrolled. Motorola said the charge would fully cover its financial exposure to Iridium, which filed for Chapter 11 bankruptcy protection in August. Iridium struggled to sign up subscribers to its pricey service, which allows customers to place calls from anywhere in the world via a network of satellites. Motorola, which earlier this month completed its $17 billion acquisition of television set-top box maker General Instruments Corp., said sales for its personal communications segment, which includes wireless phones, rose 13 percent to $3.5 billion, while orders rose 12 percent to $3.6 billion. Motorola said global wireless phone demand was stronger than manufacturers and component suppliers had expected at the beginning of 1999, which led to component shortages. The company said shortages would likely continue in the first quarter of 2000 and to a lesser degree in the second quarter, but said first quarter wireless phone sales would likely exceed fourth quarter 1999 levels. In the semiconductor products segment, Motorola said fourth quarter sales increased 15 percent to $1.8 billion, while orders climbed 24 percent to $2.0 billion. Analysts said they were eagerly awaiting Motorola's Tuesday morning conference call, when the company was expected to update its 2000 earnings forecasts. ``The key thing here is going to be the guidance,' said Tim Luke, telecommunications analyst with Lehman Brothers. Luke raised his price target for Motorola to $200 a share from $160 on Friday, citing increasing confidence that earnings estimates would move higher throughout 2000. Motorola's share price has more than doubled in the last year, powered by explosive demand for wireless phones. The stock price was also boosted by a turnaround in the global semiconductor market and internal cost cuts which improved profits. In 1998, the company announced a sweeping restructuring plan and slashed thousands of jobs in an effort to cut costs and improve profits. Those moves began to pay off later that year, but Motorola's fourth-quarter 1998 profits still fell 60 percent from the prior year's level. Earlier Stories Motorola Profits More Than Triple (January 17)