Analysts polled by First Call pegged Motorola for a profit of 15 cents a share, following two profit warnings earlier in the quarter.
In October, Motorola said it would post a profit of 27 cents a share, down from an initial consensus estimate of 37 cents.
Sluggish chip and cell phone sales prompted company officials to lower estimates again in December.
The $10.1 billion in sales marks an 11 percent improvement from the year-ago quarter. However, the $355 million profit represents a 41 percent decline from the year-ago quarter, when it earned $564 million, or 25 cents a share, on sales of $9.1 billion.
For the fiscal year, Motorola earned $1.9 billion, or 84 cents a share, on sales of $37.6 billion, compared with a profit of $1.4 billion, or 63 cents a share, on sales of $32 billion the previous year.
Motorola met analysts? estimates last quarter when it pocketed $598 million, or 26 cents a share, on sales of $9.5 billion.
"Despite the higher sales, increases in manufacturing costs and operating expenses caused operating profits to decline," COO Robert Growney said in a prepared release. "We have taken steps to reduce the cost structure in our manufacturing activities and to tightly control operating expenses. Further steps will be taken in 2001 to return the corporation to generating growth in its earnings."
Despite weakness in chip and cellular phones sales, broadband communications sales kept an already bad quarter from being a disaster.
Personal communications sales improved 1 percent to $3.5 billion in the quarter, but orders fell 20 percent to $2.9 billion. Operating profits slipped to $76 million from $242 million in the year-ago period.
Global telecommunications sales rose 19 percent to $2.1 billion and orders jumped 5 percent $1.8 billion. Operating profits in this segment declined to $193 million from $245 million in the year-ago quarter.
Commercial, government and industrial systems sales inched up 8 percent to $1.3 billion and orders increased 14 percent to $1.4 billion. Operating profits improved modestly to $185 million from $182 million.
Broadband communications sales surged up 52 percent to $1.1 billion and orders shot up 49 percent to $1.1 billion. Operating profits rose to $156 million from $56 million in the same period last year.
Chip sales moved up 7 percent to $1.9 billion, but orders dropped 19 percent to $1.6 billion. Meanwhile, operating profits rose to $158 million from $80 million in the year-ago quarter. Company officials said chip orders were down in all regions.
Integrated electronic systems sales improved 9 percent to $764 million, while orders inched up 4 percent to $708 million. Operating profits edged up to $69 million from $64 million in the year-ago quarter.
Eighteen of the 27 analysts following the stock maintain either a "buy" or "strong buy" recommendation.
Analysts are forecasting a profit of 83 cents a share in fiscal 2001 on sales of $41.4 billion.