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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (36075)	12/7/2000 7:47:21 AM
From: tekboy	Respond to of 54805

Uh-Oh... Motorola Expects Lower Than Anticipated Fourth Quarter Sales and Earnings SCHAUMBURG, Ill., Dec 7, 2000 (BUSINESS WIRE) -- Motorola, Inc. (NYSE: MOT chart, msgs) today announced that it does not expect to achieve its earlier guidance for sales and earnings in the fourth quarter of 2000. Operating profits will not meet earlier guidance in the Semiconductor and Personal Communications segments. Operating profits in the company's Personal Communications Segment are being adversely affected by delays in achieving expected cost reductions in wireless phone production, the company said. In addition, slowing market conditions in the worldwide semiconductor industry, believed to be due to inventory adjustments by customers, are adversely affecting the sales and operating profits of the company's Semiconductor Products Segment. Sales for the fourth quarter of 2000 are now expected to be $10 billion and earnings per share are now expected to be 15 cents. The earlier guidance given in October was sales of $10.5 billion and earnings per share of 27 cents. Sales in the first quarter of 2001 are currently expected to be $8.8 billion and earnings per share to be 12 cents. These estimates exclude special items. Motorola said it is completing its normal planning process for the upcoming year and intends to provide sales and earnings per share guidance for the full year 2001 when it announces its final results for the current year, in accordance with its normal practice. The guidance is expected to be lower than the estimates given in October of $44 billion in sales and earnings per share of $1.20. Motorola began implementing various new cost reduction actions in the third quarter of 2000, which are being followed by additional actions in the fourth quarter of 2000 and will continue in the first quarter of 2001. These actions, which include consolidation of manufacturing operations and out-sourcing of manufacturing, will result in charges against earnings, to be reported as special items, in the fourth quarter of 2000, as well as in the first quarter of 2001. The company also will report gains from the sale of securities in the fourth quarter of 2000. Motorola continues to expect robust growth in the global wireless telephone market, with unit sales in the range of 525-575 million in 2001, up from an estimated 420 million units this year, and expects to fully participate in that growth. The company also believes that the beneficial impact of cost reductions in its product portfolio of wireless telephones will also be evident by mid-year 2001. The company also believes that the inventory adjustments by semiconductor customers should be completed by mid-year 2001. Robert L. Growney, president and chief operating officer, said, "Even though it is necessary to reduce our expectations for sales and earnings in the short term, we continue to believe that tremendous long-term opportunity exists at three levels of the value chain - embedded chips, embedded electronic systems and end-to-end integrated communication solutions -- for wireless, broadband and Internet markets. This is the core of our strategic focus." Motorola senior management will conduct an analyst conference call today at 9.a.m Eastern time, 8 a.m. Central time. A live audio webcast will be available at www.motorola.com/investor. A recording of the call will be available on the website and for replay at 1-402-220-0071. Motorola, Inc. (NYSE: MOT chart, msgs) is a global leader in providing integrated communications and embedded electronic solutions. Sales in 1999 were $33.1 billion. tekboy@I'vegottroubleshangingoverme.com

To: Apollo who wrote (36075)	12/7/2000 8:47:21 AM
From: Bruce Brown	Read Replies (2) \| Respond to of 54805

I'm not sure that credibility is at stake because the three authors decided to address an important development when the gorilla we call the "Internet" came along and allowed for a variety of first wave business models to develop and embrace it. It is an ongoing game and will have other waves of business models that embrace it as well as enhance it. Not to mention the embracing we are now seeing by traditional 'old economy' stocks of the Internet via entering the space either through retail divisions (Wal-Mart, K-Mart, etc...) or through conducting online business under the umbrella space of business to business. Be it Cisco, Dell, Intel, General Electric, Home Depot, Caterpillar, Pfizer or a plethora of others. The revision of the manual took place when an entire wave of companies (the dotcom's) were certainly going public and the importance of those initial waves which began back with AOL in 1992/93 and led into 1998-2000 where a lot of venture capital and investment capital was being addressed in the space. I think that the credibility issue for the authors including discussion of this important element of the economy is not at stake. I welcomed the attempt at presenting the idea of what was going on knowing that it was a work in progress - or a 'real time' development. Likewise, in the first manual, things were presented in real time games that had not yet played out to the end (SCM, CRM, DCM, etc...). Perhaps my view is altered because the follow through and continued discussion has taken place on the GG listserv about the Internet based business model companies and the waves that we've been through and are headed towards in the future. At the end of it all, the strongest models will survive. Likewise, in future waves of business models that embrace the Internet, the lessons of the past will certainly temper both venture capital firms as well as the consulting firms which might result in the beneficial aspect of only the strongest models receiving attention. In the meantime, the survivors of the first wave will continue to plant their roots and strengthen their positon for the future. I imagine Moore, Johnson and Kippola could have chosen not to write about it and wait until all the games were over, but the attempt to present it while the game was underway using the 4 biggies that captured the first wave status doesn't - IMO - put their credibility at stake. The good news about the Godzilla 'wave' is that after the mania up and back down, the best lesson learned is to use traditional valuation to measure the business fundamentals. The same could be said for our gorillas and kings as they rode up in the mania and have started to come back down somewhat as well. No need to mention valuations are still pounding at the top end of 'best case' scenario situations for just about each and every one of them in light of the economic slow down. Rather than place ourselves back in the height of the mania or where we were in time when the revised manual's chapter was written, why not move forward and see what the fundamentals are of the survivors in the Godzilla based business model? Or what they will be as we move through time? Using a lot of issues of the network effect project, the authors may have not been so far off base at trying to determine a model that would be able to survive and thrive for years to come. I will agree that it is a 'real time' development, but so are a lot of the issues our beloved enabling technology and software companies are involved with at the moment. Perhaps the idea of 'cashing in' on the trend might prove to have not been the case over the long term as companies like AOL and Yahoo! continue to grow earnings and improve their fundamentals over the years just has they have in the past 5 to 8 years. Sorry for my previous rant post. Even if one has never invested in shares of a Godzilla, in terms of how that particular space plays out and what kinds of business models survive - I think it is an interesting study to see what the elements are of those models that have allowed them to survive to date and will allow them to survive in the future. Don't get me wrong, I would much rather have the majority of my investment money placed in the picks, tools and shovels that allow those companies to exist in the infrastructure. I could have carried the entire conversation on over on the Godzilla thread, but I'd be talking to myself if I did. <ggg> BB