Motorola’s 4th-Quarter Profit More Than Triples

Motorola Inc., the world’s No. 2 maker of cellular phones, opened what is expected to be a strong week for U.S. corporate earnings overall, reporting Monday that its fourth-quarter profit more than tripled.

Thanks to soaring demand for digital mobile phones, Motorola said its profit from operations rose to $514 million, or 82 cents a share, from net income of $159 million, or 26 cents, a year earlier.

Revenue was up 1.9% to $8.45 billion, although after accounting for businesses sold over the last year, revenue rose 7%.

But whether the results will be enough to satisfy investors--who bid Motorola shares up $12.44 to a record $151 on Friday--remains to be seen as trading resumes today. (U.S. markets were closed Monday for Martin Luther King Day.)

Motorola shares have helped lead the technology sector in recent months, as analysts have repeatedly boosted their price targets for the company’s stock amid surging expectations for both its phone unit and its semiconductor unit.

The company said sales at its personal communications unit, which includes cell phones, jumped 13% to $3.5 billion in the quarter, boosted sharply by Asian demand.

But phone orders received from customers in the Americas fell in the quarter, which Motorola said may have been because customers ordered significantly more phones in the third quarter, anticipating parts shortages.

The company said a shortage of some parts for wireless phones may continue into the second quarter.

“They would have destroyed [earnings estimates for] the quarter” if not for the parts problem’s effect on orders, said Ed Snyder, a Chase H&Q; analyst.

As it was, Motorola’s earnings beat Wall Street analysts’ average estimate of 81 cents a share. But revenue was less than the $8.9 billion widely expected. And some analysts had expected earnings as high as 84 cents.

Motorola, the world’s No. 6 semiconductor maker, also is profiting from a restructuring of its sprawling chip business during the last two years. The company cut jobs and sold lower-profit lines to concentrate on more profitable products.

Sales in the semiconductor unit increased 15% to $1.8 billion for the quarter, and orders rose 24% to $2 billion.

The company had an operating profit of $81 million in the chip unit, contrasted with an operating loss of $102 million a year ago.

Gains and charges that together totaled $165 million, or 26 cents a share, reduced final net income to $349 million, or 56 cents, for the quarter.The charges include $518.7 million for Motorola’s financial exposure to the Iridium satellite venture.

Motorola said the charge would fully cover its exposure to Iridium, which filed for Chapter 11 bankruptcy reorganization last August.

Motorola executives will hold a conference call with analysts this morning . The company is expected to update its earnings outlook for 2000. “The key thing here is going to be the guidance,” said Tim Luke, analyst at Lehman Bros. in New York, who on Friday raised his 12-month price target for the stock to $200.

Analysts on average now expect Motorola to earn $3.10 a share in 2000 and $4.12 a share in 2001.

Excluding one-time items, Motorola earned $2.08 a share for 1999 on revenue of $30.9 billion.

Reuters was used in compiling this report.