To: Original Mad Dog who wrote (47385 ) 8/1/2000 1:46:24 PM From: John Pitera Read Replies (3) | Respond to OMD.....what's this ...I got a good post mention -g-MOT somehow coming out of Let's ask for Jorjie's gut check on this one!!! revenue and EPS forecasts for 2000 of $39.5 bln and $1.05; and for 2001 of $47.0 bln and $1.43. This should not come as too big of a surprise as the company had already provided guidance for 2000 in its Q2 conference call last month. However, since then Nokia and Ericsson warned they would not meet Q3 forecasts but the meeting should allay fears that Motorola would come out with a Q3 warning. We expect a strong second half for Motorola as the company expects its Personal Communications Segment to reach an operating margin of 10% by Q4. When you run the numbers, the second half looks impressive. Each 1% improvement in operating margin for this segment even assuming flat sales with Q2 of $3.3 bln computes to a penny per share on the EPS line assuming a 32% tax rate. With a 4% operating margin in Q2, this adds $0.06 per share to EPS by 4Q even with no progress in its other segments. Operating margin is also expected to expand sequentially in 3Q . The semiconductor and broadband communications segments should do well in the second half as well. As for semiconductors, the company recently raised its industry forecast to 30% from 25% in 2000 and expects 25% growth in 2001. The Broadband Communications segment should continue to benefit from the synergies being realized from the recent combination with General Instrument. Motorola looks attractive at current levels as it trades at just 24x forward earnings on expected 19% top line growth next year. -- Robert J. Reid, Briefing.com
