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Archive for Thursday, October 11, 2001

Motorola announces another loss

Firm cuts 7,000 jobs

October 11, 2001

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— Slumping tech giant Motorola Inc. said Wednesday that it would cut 7,000 more jobs and confirmed that it was headed for a fourth straight money-losing quarter.

The announcement came a day after the cell phone and semiconductor manufacturer reported a $1.4 billion loss for the quarter ended Sept. 30.

Faced with a weakened economy and slower industry growth in worldwide cell phone sales, Motorola already this year had announced 32,000 job cuts to a work force that stood at 147,000 last December.

Robert Growney, the company's president and chief operating officer, disclosed to analysts in a conference call Wednesday that the Schaumburg, Ill.-based company now would eliminate 4,000 more positions associated with businesses sold and another 3,000 through other cuts and attrition.

That would increase the total cuts to 39,000 and trim the work force to about 108,000 by the end of the year a reduction of about 26 percent. Growney indicated there could be more.

"Motorola will continue to take appropriate cost-reduction actions," he said.

The company already has reported losses totaling $2.7 billion, or $1.23 a share, for the first nine months of 2001.

Executives said they anticipate a loss of 4 cents to 5 cents a share in the fourth quarter a slight improvement from the previous two quarters.

Kicking off an uneasy earnings season for the tech sector, the company said late Tuesday that its biggest business, cell phones, finally had returned to profitability and that market share had improved two points to 17 percent. But overall sales sank 22 percent from a year earlier, semiconductor sales tumbled 48 percent and even Motorola's claim of a recovery for cell phones was questioned.

Analyst Todd Bernier of Morningstar said the results showed "across-the-board weakness" for Motorola.

The third-quarter loss amounted to 64 cents a share, compared with earnings of $531 million, or 23 cents a share, in the third quarter of 2000.

Including a slew of pro forma adjustments and special charges, the operating loss was $153 million, or 7 cents a share, matching the estimate of a consensus of analysts surveyed by Thomson Financial/First Call.

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