The company posted profits of $180 million, or 23 cents a share, in line with downward revised estimates. Analysts lowered their expectations for the electronic equipment and components maker after the company warned last month that its results would come in "well below" Wall Street's expectations due to weakened Asian currencies.
Prior to Motorola's earnings warning last month, estimates had pegged the company's earnings at 47 cents a share. Motorola reported profits of $325 million, or 53 cents per share, for the same quarter a year ago.
Revenue for the quarter grew 4 percent, to $6.9 billion, compared with revenue of $6.6 billion reported for the same quarter last year.
"The first-quarter results were greatly affected by the worldwide impact of Asian deflationary currency-influenced price competition, lower Asian consumer confidence than a year ago, and unfavorable shifts in product mix," Motorola CEO Christopher Galvin said in a prepared statement. "These conditions may continue for several more quarters."
Motorola said second-quarter sales are expected to be below those of a year ago, when the company reported sales of $7.5 billion. Second-quarter earnings also are expected to be well below current investment community expectations, and could be equal to or less than 1998's first-quarter earnings, excluding special items, Galvin said.
Analysts currently have second-quarter expectations set at 43 cents per share, according to First Call.
The technology giant typically kicks off the corporate earnings season, and this quarter analysts are watching Motorola for further indications on the influence of weak Asian economies.
"They have substantial exposure in Asia," said Eric Buck, an analyst with Donaldson Lufkin & Jenrette. "They'd have to be viewed as a bellwether in the Asian sector."
Motorola warned last month that its earnings would come in at least 25 percent below estimates, citing the effect of weakened Asian currencies, primarily in the semiconductor business.
Analysts noted that the changing wireless phone market also is hurting the company. An overwhelming leader in analog, Motorola has been late to market with digital phones and has fought technical problems--now resolved--with new equipment used in wireless phone networks.
In addition, pricing pressure in another big Motorola market--pagers?has intensified as currencies in Asia weakened.
"There was a preannouncement, so there shouldn't be any surprises," said Lehman Brothers analyst Todd Koffman.
In fact, one analyst said he was contacted by Motorola and told the company he was not comfortable with his 32-cents-a-share estimate.
Although analysts said they did not expect surprises on earnings, they will look for additional information on a possible corporate reorganization. Motorola has confirmed that it is discussing forming two huge units--one focused on consumers and the other on industrial customers--but the company said no decision has yet been made.
Motorola's stock has been gaining of late. It recovered some ground from a 52-week low of 52-5/16 set soon after the warning, but is still significantly lower than the 90-8/16 year-high reached last summer.
Analysts said the gradual move higher is indicative of both the long-term prospects of Motorola's key markets and the power of its brand name.
"[Investors] are writing off 1998 and looking at 1999 if they're buying today," said Chris Chaney, an analyst with A. G. Edwards. "They know 1998 will be affected by Asia."
Reuters contributed to this report.