Motorola's First-Quarter Earnings More Than Double

Motorola(MOT Quote), the second largest mobile phone maker, said Monday that its first-quarter earnings more than doubled, with a strong sales performance coming from its network systems, semiconductors and personal communications units.

The company, based in Schaumburg, Ill., said its earnings from continuing operations, excluding special items, rose to $449 million, or 59 cents a diluted share, compared with $184 million, or 26 cents a share, in the first quarter of 1999.

The latest quarter's results were a penny better than the 58 cent consensus estimate of analysts polled by First Call/Thomson Financial.

Revenues totaled $8.8 billion, compared with $7.3 billion in the year-earlier period. Including sales from businesses sold later in 1999, revenues grew 13%.

In the first quarter of 2000, Motorola took pre-tax charges of $2 million from merger and integration costs from its $17 billion acquisition of General Instruments.

Before Motorola's financial results were released, the company's shares closed down 4 points, or 3%, at 149 3/4, as the whole technology sector buckled beneath the falling Nasdaq. The stock was halted in after-hours trading.

The company said its profit margins rose to 5.1%, from 2.5% in the comparable 1999 quarter.

"We are especially pleased by the results in our new broadband communications sector, which was formed after the merger with General Instruments, the improvements in our network business systems and the sequential growth in quarterly earnings for semiconductors," Robert Growney, president and chief executive, said in a statement.

Personal communications sales rose 24%, to $3.2 billion, while profits in the segment declined from consumer demand for cheaper phones and stronger competition.

Network systems sales increased 11%, to $1.8 billion, despite significant declines in sales and orders of satellite communications equipment. Excluding the impact of satellite communications equipment, network sales would have jumped 25%.

Sales in semiconductor products rose 24%, to $1.9 billion. Operating profits soared to $123 million, from $10 million a year earlier.

Broadband communications revenues increased 15%, to $678 million, while operating profits rose 49%, to $91 million, as a result of synergies with General Instruments, the company said.