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Tech Industry

Motorola hits estimates in third quarter

    Motorola Inc. (NYSE: MOT) met analysts' estimates in its third quarter Tuesday, raking in $332 million, or 53 cents a share, on sales of $7.7 billion. Its shares closed off 1 11/16 to 67 1/8 ahead of the earnings report.

    First Call consensus pegged the semiconductor manufacturer for a profit of 53 cents a share in the quarter.

    The $7.7 billion in sales represents a 7 percent improvement compared to the year-ago period when it made $40 million, or 7 cents a share, on sales of $7.2 billion.

    "These strong improvements in our financial operating performance are a result of significant sales growth in digital wireless phones and a focused repositioning and restructuring of our semiconductor and digital communications businesses over the last year," said COO Robert Growney in a prepared release.

    In the quarter, Motorola reported special items resulting in a net charge of $344 million pre-tax, or 39 cents per share after-tax.

    Last quarter, Motorola snuck past analysts' estimates, earning $273 million, or 44 cents a share, on sales of $7.5 billion.

    Wireless phone sales lead charge

    Sales of the company's personal communications business, which includes wireless telephones, surged 37 percent to $3.1 billion and orders improved 67 percent to $4.3 billion. The segment posted a profit of $140 million compared to a loss of $55 million in the year-ago period.

    Company officials said digital phone sales represented 89 percent of its total wireless phone sales in the quarter with most of the growth coming from Global System for Mobile communications products in Europe and Code Division Multiple Access products in Asia and the Americas.

    Sales for paging products declined significantly and orders were lower, due to continued weakness in all regions, especially Asia. Consumer two-way radio product sales and orders were significantly higher.

    Its network systems segment declined 17 percent to $1.6 billion and orders increased 1 percent to $1.5 billion. Operating profits declined to $186 million from $337 million a year ago. The segment sales decline is almost entirely due to lower satellite communications equipment revenue.

    Semiconductor sales jumped 11 percent to $1.6 billion while orders improved 24 percent to $1.8 billion. The segment turned a profit of $60 million this quarter compared to a loss of $184 million in the year-ago period.

    Looking ahead, CEO Christopher Galvin said Motorola is now positioned to take advantage of improving economic conditions abroad.

    "The comprehensive changes we have made across the company over the last 18 months are improving our ability to execute and perform financially," Galvin said in a prepared release. "Economic conditions continue to improve throughout much of the world, led by Asia and Europe. We believe that as more of our new products and solutions reach the marketplace, sales and earnings growth will continue."

    Motorola shares hustled up to a high of 101 1/2 in September after falling to a low of 44 7/16 last October.

    Twenty-seven of the 35 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

    First Call consensus expects it to earn $2.04 a share in the fiscal year.