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2HRS2GO: Motorola call goes by the numbers

    COMMENTARY -- If you're not going to say anything, why have a conference call?

    Here are excerpts from the press release for the fourth quarter preannouncement of Motorola (NYSE: MOT):

    "...Operating profits in the company's personal communications segment are being adversely affected by delays in achieving expected cost reductions in wireless phone production, the company said...

    "Motorola said it is completing its normal planning process for the upcoming year, and intends to provide sales and earnings per share guidance for the full year 2001 when it announces its final results for the current year, in accordance with its normal practice...

    "Robert L. Growney, president and chief operating officer said, 'Even though it is necessary to reduce our expectations for sales and earnings in the short term...' "

    Here are excerpts from the accompanying conference call's opening statement, by investor relations director Ed Gams:

    "...Operating profits in the company's personal communications segment are being adversely affected by delays in achieving expected cost reductions in wireless phone production, the company said...

    "Motorola said it is completing its normal planning process for the upcoming year, and intends to provide sales and earnings per share guidance for the full year 2001 when it announces its final results for the current year, in accordance with its normal practice...

    "Robert L. Growney, president and chief operating officer said, 'Even though it is necessary to reduce our expectations for sales and earnings in the short term...' "

    Good thing the press release didn't have page numbers at the bottom, or Gams might have read those aloud too.

    Perhaps it's unfair to single out Motorola for carrying out the common corporate conference call practice of reiterating the press release on conference calls, but the company is in the business of selling communications equipment; the least it could do is communicate well. At least make Growney, who was on the call, read his own prepared lines.

    When Growney did speak, it occasionally resulted in answers like this:

      "On the market side and the market story, it's mixed. We have seen a fairly rapid slowdown in the distributor segments of the standard products. We've seen some slowing in the network and computing arena -- but very still robust rates yet -- but a slowing. We see some slowing in transportation, and obviously a little bit in the wireless business, which is for the most part internal.

      "The market conditions that we see, and I think others are commenting on, are based upon a lot about the questions of inventory adjustment and so forth. And we do subscribe to the view that, well, we're going through this as a part of the semiconductor cycle, but we really do see a clearing of some of these issues as we get into, you know, through the first half of next year.

      "The comment, I assume the question on volumes and so forth, where mixing is in, again, semiconductor -- this is a volume issue. Mixing in the context of, you know, we still have profitability in that segment, the slowness we see in transportation, for example, where we've been working hard to improve our margins, obviously, as an offset against those that we see in networking, where the slowness isn't as rapid -- that's helpful. But at the same time, our standard products and distribution channels are also fairly good margins and there has been a rapid drop-off there.

      "So we are, yes, we're seeing a volume mixing aspect because of the variants that these markets produced for us, but that is, as they were describing... (noise drowns out this part) ... in a fashion of, is there something out there that we see different than others, as far as changing need? The answer is no. It appears to be an inventory adjustment period."

    You can find aspirin at your nearest pharmacy.

    To be fair, note that executives did try their best to answer questions from analysts. In fact, even the above quote addressed an issue; it just took almost 300 words to get to the one and only sentence that directly answered the analyst's question.

    Motorola's executives -- by the way, where were the CEO and CFO? Even a lame duck CEO like Eric Benhamou showed up for 3Com's warning this week -- provided little information beyond the PR sheet. I know, I know -- the final numbers for the quarter aren't in yet, so there isn't much they could add. Maybe executives poured everything important into the press release, to make it easy for investors.

    But it doesn't have to be that way. The conference call earlier this week for the warning of Apple (Nasdaq: AAPL) was very informative. Shareholders of Apple (speaking of companies contributing to the chip inventory reduction cited by Motorola) would have been well-served to tune in.

    Motorola investors could have slept through this one and not missed a beat. The press release isn't going anywhere. 22GO>