Motorola Stock Slides on Profit Report

Semiconductor producer Motorola Inc. reported weaker-than-expected third-quarter earnings Tuesday, sending the company’s shares tumbling nearly 12%.

Motorola’s stock fell $7, or 11.7%, to close at $52.75 on the New York Stock Exchange after the company said its profit in the period was $102 million, up from $89 million a year ago.

But that was well below what analysts had predicted. The consensus was that Motorola would post earnings from 90 cents to “just over $1.”

Motorola said semiconductor product sales rose by a record 14% in the quarter but that its core cellular telephone businesses had lower operating profits, primarily because of heavy investments in technology.

The company was nonetheless bullish about its performance, which included higher sales and earnings for the third quarter and the first nine months of 1990.

George Fisher, the company’s chairman and chief executive, said the third-quarter earnings were on target with Motorola’s expectations.

“I feel good about the results,” Fisher said in an interview, although he declined to comment on prospects for the balance of the year or on the company’s stock activity.

“Our customers are investing in Motorola products, systems and services that will improve productivity and efficiency and save time,” Fisher said.

The Schaumberg, Ill.-based company reported that third-quarter sales rose 12% over the same period last year, to $2.7 billion from $2.41 billion.

For the first nine months of the year, profit rose to $390 million, from $366 million in the year-ago period. Sales were $7.95 billion for the nine-month period, up from $6.97 billion.

Motorola released its earnings a day after it announced the settlement of a patent infringement lawsuit with Hitachi Ltd.

Motorola has refused to give details of the settlement. Hitachi had threatened to cut off supplies of key parts to American computer manufacturers.