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Motorola sees trouble ahead

Motorola warns that earnings for its third quarter may be "significantly below" analyst expectations.

Motorola (MOT) announced today that earnings for the third financial quarter ending at the end of September may come in "significantly below" those of this year's second quarter and analyst expectations.

Motorola said the slowdown in semiconductor chip sales and demand is the most significant factor leading to the announcement. International sales and orders in cellular phones, paging, and modem businesses are also down. There are increasing pricing pressures in those areas as well, the company warned.

A report by the Semiconductor Industry Association released a report yesterday that showed improvements in the book-to-bill ratio for semiconductors. Motorola noted that that ratio is still less than one, however.

Motorola earnings for the second quarter of this year were $326 million on revenue of $6.83 billion.