Motorola Posts Second Straight Operating Loss
{{#rendered}} {{/rendered}}Wireless technology giant Motorola Inc. rang up its second consecutive operating loss Wednesday, citing difficulties in the telecom and semiconductor industries.
The Chicago area-based company reported a second-quarter operating loss of $232 million, or 11 cents a share, excluding special items, compared with $551 million, or 25 cents a share, in the same period last year.
After Motorola warned in April that its second-quarter result would be a few cents worse than the first-quarter loss of 9 cents per share, analysts had expected it to post a 12-cent loss, with a range of a 10-cent loss to a 15-cent loss, according to Thomson Financial/First Call.
{{#rendered}} {{/rendered}}Sales fell 19 percent to $7.5 billion from $9.3 billion last year.
"Despite the difficulties the telecom and semiconductor industries continue to experience and our operational loss for the second quarter, we continue to strengthen our balance sheet," Motorola President Robert Growney said in a statement.
In the second quarter, Motorola reported a net charge of $496 million pre-tax, or 24 cents a share after-tax, mostly related to various cost-reduction activities and asset impairments. The charges were partially offset by gains from sales of investments.
{{#rendered}} {{/rendered}}Including one-time charges, the second-quarter 2001 loss was $759 million, or 35 cents a share, compared with earnings of $204 million, or 9 cents per share, in the second quarter of 2000.
Shares in Motorola closed up 17 cents, or 1 percent, at $15.67 on the New York Stock Exchange before the announcement Wednesday.
Over the past year, the company's stock has underperformed the Standard & Poor's 500 index by about 41 percent. On the other hand, it has outperformed a handful of competitors in the S&P Communications Equipment index by almost 130 percent over the same period.
{{#rendered}} {{/rendered}}The No. 2 mobile phone maker behind Finland's Nokia had warned in April it would report a second-quarter loss a few cents per share wider than the first quarter's 9-cent loss. It also expected sales to "increase somewhat" from the $7.8 billion in the first quarter.
Motorola, with a presence in several segments including mobile phones and semiconductors, has not been the only telecom company affected by the slowdown in customer spending amid the faltering global economy.
Nokia, believed by some investors to be largely immune to the slowdown's effects, last month issued a surprise second-quarter profit warning, saying weak global mobile phone demand slashed second-quarter profit expectations by 15 percent to 25 percent. It also halved its sales growth outlook for the quarter to less than 10 percent.