‘Whisper Numbers,’ Warning Batter Motorola Shares

As Motorola Inc. shareholders were reminded Tuesday, “whisper numbers” and profit warnings are being heard loud and clear.

The wireless phone maker’s shares (ticker symbol: MOT) tumbled after the company forecast second-quarter earnings below estimates. The conservative second-quarter outlook overshadowed first-quarter earnings reported Monday, which came in 1 cent per share higher than analysts’ consensus estimate but shy of the more optimistic “whisper” numbers.

Shares plunged $26.25 to $124 on the New York Stock Exchange, bringing them underwater this year and 33% below their recent peak.

“My sense is that expectations kind of got ahead of reality, and you couple that with nervousness about Nasdaq, and it meant a tough day for Motorola stock,” said Robert Wilkes, telecom analyst with Brown Bros. Harriman.

Motorola’s woes did not appear to infect the wireless sector, however, as Nokia’s U.S. shares (NOK) were unchanged at $54.75 on the NYSE.

Analysts were disappointed with a steeper-than-expected 41% drop in first-quarter wireless phone handset earnings. Motorola blamed the decline on a shift toward lower-margin phones, ongoing component shortages, and higher engineering and advertising spending.

Motorola has been discounting its higher-priced phones to compete with No. 1 Nokia in the market for cheap cell-phone packages in Europe, said analyst Ed Snyder at Chase H&Q.; Nokia already had an inexpensive model designed for first-time buyers, and Motorola started making one only recently.

“Nokia can print money while Motorola loses money,” said Snyder, who nonetheless rates Schaumburg, Ill.-based Motorola a “buy.”

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Blue-Chip Blues

Motorola shares slid 17% on Tuesday after the company failed to beat its earnings “whisper” number and issued a second-quarter profit warning. Weekly closes and latest:

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Tuesday: $124, down $26.25 *

Source: Bloomberg News