Motorola boss 'very disappointed' with Q4
05-01-2007
by Emmet Ryan

Motorola has sounded a warning to investors as preliminary results indicate the communications devices company will not meet fourth quarter estimates.

Motorola's preliminary estimates for the fourth quarter of 2006 were released on Thursday with sales of between USD11.6 billion and USD11.8 billion predicted for the period. That's a considerably lower range than the USD11.8 billion to USD12.1 billion forecast estimated in October.

Earnings per share for the quarter are expected to be between USD0.13 to USD0.16, which is below the company's internal forecast. The EPS estimate includes estimated charges of approximately USD0.10 per share.

Although Motorola has recorded 24 consecutive quarters with positive operating cash flows, the company's management expressed disappointment with the latest premilinary results.

"We are very disappointed with our fourth-quarter financial performance," said Ed Zander, chairman and chief executive of Motorola. "But we remain committed to the strategic direction and long-term financial targets we discussed at our annual analysts meeting in July 2006. We will discuss plans to improve operating profitability on 19 January when we announce fourth-quarter earnings."

The shortfall in both sales and earnings is largely down to the company's mobile devices business performing below expectations although this sector still showed growth. Approximately 66 million units were sold in the period, representing a 23 percent increase from the previous quarter and growth of 48 percent compared with the fourth quarter of 2005.

Motorola expects its networks & enterprise and its connected home segments of the business to meet or exceed expectations. The full fourth quarter results will be announced on Friday 19 January at approximately 11.30am Irish time.