Motorola not out of woods yet
The company posts better-than-expected results for its second quarter, but warns that the "negative impact" of the Asia crisis is likely to continue.
The company posted earnings of $6 million, or 1 cent per share, for the second quarter ended June 27, compared with $392 million, or 64 cents, for the like period a year ago. Quarterly sales fell to $7 billion from $7.5 billion.
According to First Call's consensus of analysts' estimates, Motorola was expected to lose 4 cents per share for the quarter.
The company posted special charges of $1.91 billion before taxes, stemming from a restructuring plan announced on June 4. The massive cost-cutting campaign included plans to eliminate 15,000 jobs, or 10 percent of the electronics and chipmaking conglomerate's workforce.
"As we indicated last month, the second-quarter results reflect further slowing of demand and continuing global pricing pressure, principally in the semiconductor products and messaging, information, and media segments, and driven primarily by economic conditions in Asia," Motorola president Robert Growney said in a statement.
Added chief executive Christopher Galvin: "The currency-related impact on pricing and consumer confidence continues to affect the Asian region and Motorola. The negative impact on our business is likely to continue for at least the remainder of the year."
Among technology companies, Motorola has been one of the hardest hit by the Asian economic crisis, but some analysts say the company must share some blame for its financial woes.
"In the next few days," Galvin continued, Motorola will announce a "communications enterprise" that links together all of the company's communications businesses.