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To: StanX Long who wrote (10735)	7/30/2003 1:02:38 AM
From: StanX Long	Read Replies (1) \| Respond to of 95456

Motorola aims to boost profits; analysts skeptical Tuesday July 29, 8:16 pm ET By Ben Klayman biz.yahoo.com ROSEMONT, Ill., July 29 (Reuters) - Motorola Inc. (NYSE:MOT - News) executives on Tuesday laid out long-term plans for boosting sales and profits, but analysts are skeptical whether the world's second-largest maker of wireless telephones can back that up with results. Motorola aims to defend its leading market share in the U.S. and China cell-phone markets, and take share in Europe and the rest of Asia, where it has struggled, executives said at the company's annual analysts' meeting here. "There's a very short leash on all of us," said Mike Zafirovski, Motorola's president and chief operating officer, referring to the drive to improve the company's profits He did not provide a timetable for when Motorola would achieve its goal. The Chicago area-based company said it is targeting long-term annual sales growth of 8 percent to 10 percent, and operating earnings at 15 percent of sales -- goals none of its business units achieved last year. Analysts have heard Motorola make such promises before, however. "Every time they promise things are going to be better," Sanford C. Bernstein analyst Paul Sagawa said. "The promise is never fulfilled. How much credit do you give them after six years of watching them promise and not deliver?" Motorola executives were quick to point out that at last year's analyst meeting they promised a return to profits and the recapture of the U.S. cell-phone market leadership from larger rival Nokia (NOK1V.HE)(NYSE:NOK - News), both of which they did. They see growth opportunities with increased share in existing markets, expansion into related markets and regions,and the cultivation of new markets and technologies, said Christopher Galvin, chairman and chief executive. "What I want my legacy to be ... is to add a financial performance and rigor to the way this company performs for shareholders," he said. PREVIEW OF NEW PRODUCTS Executives from the cell-phone business, which accounts for about 40 percent of overall company sales, detailed some of the 30 new products that will be introduced in the second half of the year, including 13 in China, after having a dearth of products in the first half. The new models include the MS150, a square phone with a wide color display and integrated digital camera that can fit in the palm of a hand. It went on sale in Korea in May. "No more 'dump 15 products on the market' and then go dry for a couple of quarters. You're going to see a continuous flow of products out of this business," said Tom Lynch, head of the cell-phone unit. However, Motorola has recently trailed rivals, especially in such hot-selling segments as cell phones with color screens and integrated cameras, analysts said. "Any phone I could want today, I can already get," Bear Stearns analyst Wojtek Uzdelewicz said. SoundView Technology analyst Matt Hoffman said Motorola is a better turnaround play than such equipment rivals as Sweden's Ericsson (Stockholm:ERICb.ST - News; NasdaqNM:ERICY - News), Canada's Nortel Networks Corp. (Toronto:NT.TO - News; NYSE:NT - News) and Lucent Technologies Inc.(NYSE:LU - News) Many analysts said the profit targets may be hard to achieve, considering the new models from rivals flooding the global markets. "There are so many things they're going to have to fight over the next two years," Merrill Lynch analyst Tal Liani said. Motorola executives realize they will have to convince the skeptics. "We aren't confused," Lynch said. "We know we have a long way to go." On Tuesday, Motorola's stock slipped 17 cents or 1.8 percent to close at $9.19 on the New York Stock Exchange (News - Websites). The stock's price is up 6 percent so far this year. It has recovered from its 52-week low of $7.30 hit on Oct. 17, 2002, but is below its 52-week high of $13.76 reached on Aug. 22, 2002.