Motorola Reports Loss of $2.3 Billion
Motorola Inc. said Tuesday that it suffered a record net loss of $2.3 billion in the second quarter, pummeled by $3.4 billion in special charges related mostly to a restructuring of its computer chip-making division. It was the company’s sixth consecutive unprofitable quarter. The loss nearly doubled its previous worst of $1.3 billion in the third quarter of 1998.
Yet in a positive sign amid all the red ink, the long-slumping tech giant said it had posted a $48-million profit excluding the long list of special items. That enabled it to easily exceed Wall Street’s expectations and proclaim a return to profitability one quarter earlier than previously expected.
Shares in the Schaumburg, Ill.-based company rose 69 cents to $14.53 on the New York Stock Exchange before the report was released.
Motorola’s loss amounted to $1.02 a share, compared with a loss of $759 million, or 35 cents a share, for the second quarter a year earlier. Sales declined 11% to $6.74 billion from $7.49 billion as the weakened global economy continued to pressure its two main businesses: cell phones and semiconductors.
Motorola announced last month that it would take the huge charges, mostly noncash write-downs to reflect the declining market value of factories and investments. It also said it would cut an additional 7,000 jobs, continuing a nearly two-year shrinking process that has slashed its work force from a peak of 150,000 in August 2000 to a planned 93,000.
Motorola said sales rose 5% to $2.6 billion in its No. 1 business, cell phones, which it attributed to new handsets that recently have hit the market.
In other earnings Tuesday:
* Apple Computer Inc. reported a slide in quarterly earnings and revenue, a blow to the financial recovery it began last year. The personal computer maker blamed the decline on market weakness, which also has affected its rivals. Earnings fell to $32 million, or 9 cents a share, in its fiscal third quarter, from $61 million, or 17 cents a diluted share, a year earlier and $40 million, or 11 cents a share, in the previous quarter. Sales were $1.43 billion, compared with $1.48 billion a year earlier and $1.5 billion in the previous quarter.
* RealNetworks Inc. said its second-quarter net loss narrowed from a year earlier as revenue fell because of weak sales to corporate customers. The maker of software to send and receive audiovisual content over the Internet said its net loss was $1.6 million, or 1 cent a share, compared with a loss of $19.2 million, or 12 cents, a year earlier. Revenue slipped to $43.8 million from $47.9 million a year earlier, in the middle of its expectations of $42.5 million to $45 million.
* No. 3 independent video game publisher THQ Inc. reported a smaller profit for the second quarter, brought down by a charge for a failed venture in Britain. THQ posted a profit of $2.3 million, or 5 cents a share, compared with a year-earlier profit of $3.5 million, or 10 cents. Revenue in the quarter was $85.8 million, compared with $55.2 million in the year-earlier period.
* Telephone & Data Systems Inc., which sells local phone service primarily in the Midwest, had a second-quarter loss of $947.9 million as it wrote down the value of some investments. On a per-share basis, the loss amounted to $16.17, compared with a loss of $339.7 million, or $5.79, a year earlier. Per-share figures include preferred dividends. Sales rose 13% to $723.8 million from $642.3 million. Results include U.S. Cellular Corp., TDS’ majority-owned wireless unit.
