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To: Rob Young who wrote (131985)	4/8/2001 10:43:55 PM
From: puborectalis	Respond to of 186894

Motorola earnings to be barometer for tech Friday April 06 07:27 PM ET By Yukari Iwatani CHICAGO (Reuters) -- After two profit warnings and a drop in Motorola's stock to the lowest level in eight years, investors will be scrutinizing its earnings report next week to see if there were any signs of an improvement as the first quarter wound down. Motorola is the first major technology firm to report on the latest quarter and is considered a bellwether for the technology industry's health. "It really sets the tone for the rest of earnings. They (Motorola) are involved in so many different industries, it's a good indicator," said Matthew Hoffman, wireless equipment analyst for Wit Soundview. Analysts will be watching Motorola closely next week especially after it was forced to deny a report that it was having liquidity problems. The report caused its shares to fall 30 percent on Friday to the lowest level since April 1993. According to First Call/Thomson Financial, analysts are expecting Motorola to report a first-quarter loss ranging from a penny to 14 cents, compared with a profit of 20 cents last year. Motorola has indicated that first quarter sales will fall short of the $8.8 billion achieved a year ago. Motorola, the world's second-largest mobile phone maker, also is the first of the Big Three phone makers to report results. Nokia, the world's largest mobile phone maker, and No. 3 mobile phone maker Ericsson, are scheduled to report their earnings on April 20. Both companies have also issued warnings for the first quarter, citing a slowdown in sales. RESULTS COULD BE THE WORST IN 16 YEARS "This will probably be the worst quarter they've (Motorola) experienced in 16 years," said Ed Snyder, analyst with J.P. Morgan Chase. Nevertheless, analysts said they will be watching for any glimmer of an upturn in future guidance, or positive signals in March results as the rough first quarter wound down. They hope Motorola, which makes everything from semiconductors to mobile phones, can shed light on how tech businesses are doing amid a worsening economy. Beset by a string of earnings warnings and a loss of investor faith, technology firms have been reluctant to speculate on their long-term financial outlook. With Chief Executive Christopher Galvin talking about a recession, analysts are uncertain about how bad Motorola's results could be. "Motorola's a bit of a black box at the moment because they're laying off a lot of people and trying to reduce costs in a weak environment," Lawrence Borgman, telecommunications equipment analyst with Josephthal & Co., said. "The numbers are sort of unpredictable at the moment." J.P. Morgan Chase's Snyder said analysts will also be speculating heavily on which businesses Motorola might sell to increase its cash position. The company had said on Friday that it expects a significant increase in proceeds from the sale of investments and businesses during 2001. MARCH RESULTS ARE KEY Tim Ghriskey, portfolio manager of Dreyfus Fund, said he would be looking in particular at Motorola's business in March, which is typically a good month for tech companies because many deals tend to be approved as the quarter winds down. "If they indicate that business improved toward the end of the quarter, it should be favorable for Motorola and for technology stocks," he said. "If they indicate that business deteriorated, it's another big negative sign." Motorola said in February it could post its first quarterly operating loss in 15 years, and it has cut about 22,000 or 15 percent of its jobs this year to slash costs. The string of bad news from the firm has pushed the stock down by about 80 percent from a year high of $52.65 to $11.50 at the close on the New York Stock Exchange on Friday. The stock has underperformed the S&P 500 Index by 64 percent over the past year and underperformed rival Nokia's stock by 40 percent. LITTLE GUIDANCE EXPECTED Analysts said they hope to gain some insight into Motorola's outlook for semiconductors, handsets and broadband products, but they were doubtful that the company will give much guidance beyond the second quarter. All eyes will be watching for comments about Motorola's semiconductor and broadband businesses to glean insight about the respective industries' current business environment. Wit Soundview's Hoffman said he would also focus on indications of consumer acceptance for Motorola's phones in Europe based on GPRS next-generation technology. Motorola is the only company so far that has these phones in markets. "I think people will warm up to the story if they (Motorola) start looking like a handset leader again and one way they can do that is through GPRS," Hoffman said. Walter Casey, money manager for Bank One Investment Advisor's technology fund, said he would be focusing on the quality of Motorola's balance sheet. The Bank One investment fund owns an unspecified number of Motorola shares. "The question is more 'How will they be able to compete?' When the recovery comes, will they be in strong shape financially? Will they have to sell so many assets?" he said. Casey said investors were jittery about the balance sheet ever since Lucent Technologies reported a negative cash flow due to operational missteps.