Motorola Reports 50% Drop in Profit

Motorola Inc. said its earnings plunged 50% for the first quarter and warned that slowing sales of its computer chips and wireless phone equipment will hurt profit for several more quarters. After the close of trading, Motorola reported that its profit from operations for the period ended March 28 dropped to $142 million, or 23 cents a diluted share, from $286 million, or 47 cents, a year ago. Revenue rose 3.8% to $6.89 billion from $6.64 billion. The company, which warned about a shortfall last month, was expected to earn 25 cents a share, according to analysts polled by IBES International Inc. Motorola said the economic turmoil in Asia contributed to its weak sales. The company has been plagued by delays in bringing new products to market as the worldwide wireless industry quickly switches over to newer digital technology. Motorola will take “appropriate capital spending and cost control measures to match capacity with demand,” Chief Executive Christopher Galvin said. Those actions could include consolidating manufacturing operations, reducing staffing or shortening work weeks, the company said. Motorola shares fell 31 cents to close at $59.88 on the New York Stock Exchange.