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Moto disappoints with Q2 warning
Thursday, July 12 2007
by Billy MacInnes


Motorola is forecasting another dreary quarter, citing poor
sales in Asia and Europe for its lower-than-expected outlook.

Meanwhile, Motorola shares have risen almost 3 percent on
speculation that CEO Ed Zander may be ousted under the heat
of a new campaign by an activist investor.

The company's profit warning on Wednesday declared it now
expects second quarter sales between USD8.6 billion and
USD8.7 billion. The company had previously forecast sales
would be flat with Q1 2007 results of USD9.4 billion. The
company has also changed its outlook on the mobile market
from the first quarter, and no longer expects the business to
be profitable for the full year 2007.

This week, Motorola investor Eric Jackson published a
statement entitled "Motorola Plan B" that called for
Zander's head.

"What has been Ed Zander's mark on Motorola?" Jackson
asked in his statement. "He came with a Silicon Valley
background, but how has that experience or those past ties
translated into tangible results for the Schaumburg,
Illinois-based Motorola?

"What has he brought to Motorola that is really unique in
the last three and a half years? If it's difficult to answer
that question, we find it hard to imagine what he'll bring
moving forward, which is why we suggest a change is needed
now."

Jackson had previously stirred up dissatisfied stockholders
at Yahoo by asking then-CEO Terry Semel to apologise to
shareholders during the company's annual meeting. Semel was
replaced one week later.

This year, Motorola has replaced its CFO and acquired an
operations chief to help with company restructuring. The
company slashed 3,500 jobs in January, followed by an
additional 4,000 layoffs in May.

In addition to the forecast, Motorola announced that Stu
Reed, head of integrated supply chain operations, would
become the company's new executive VP of mobile devices. Reed
takes the job vacated by Ron Garriques, who left the company
in February to become an executive at Dell.





The Register
and its contents are copyright 2007 Situation Publishing.
Reprinted with permission.