Motorola Forecast Cut; SARS Outbreak Cited

Motorola Inc. reduced sales and profit forecasts for the year, citing excess inventory and the outbreak of severe acute respiratory syndrome in Asia.

Motorola expects to break even on a per-share basis in the second quarter, before some costs and gains. It had forecast profit of as much as 5 cents. Earnings also may miss estimates in the third and fourth quarters. Second-quarter sales will fall as low as $6 billion from an April estimate of as much as $6.6 billion, the Schaumburg, Ill.-based company said.

Motorola is one of the first U.S. companies outside the airline and tourism industries to pare forecasts because of SARS. Consumers in China have been less likely to visit public places, including stores where Motorola sells phones, a company spokeswoman said.

Increased production by Chinese rivals may be the main cause of Motorola’s falling sales in Asia, some analysts said.

Motorola shares fell 21 cents to $8.68 on the NYSE.