Motorola (MOT) continues to prove that the Belushis weren't the funniest act out of Chicago.

Even as Motorola investors endure the weakest results among the big wireless players, executives have stuck to their guns, insisting yet another great makeover awaits. The disconnect between oft-disappointed observers and supremely confident execs was never clearer than on a Wednesday morning earnings call, when the subject of 2003 projections came up.

Analysts asked where the Schaumburg, Ill., company, mired in a techwide slowdown and fresh off cutting second-quarter expectations, would find the 15% fourth-quarter sales growth it will need to hit full-year financial targets. And in a deadpan reply, the executives coolly answered that "digital six sigma" will help drive out $3 billion in costs, while the hotly anticipated i.250 superchip will ring up big sales.

If Wall Street was buying it, the same wasn't apparent from watching the stock, which sat out a techwide bounce early Wednesday to fall 8 cents to $7.86. Motorola shares are trading at less than half their 52-week high.

Great Strides

Even though Motorola has made great strides in getting its act together, it just doesn't draw the bullish crowds it did before the tech bust. Analyst and investor expectations were low going into the earnings report -- yet not low enough, it seems.

Motorola lowered second-quarter earnings projections to 4 cents per share on sales of $6.5 billion. Analysts had been looking for 7 cents on $6.53 billion in revenue, per Multex.

Laugh Riot
Motorola's yearlong slide

Despite the short-term drop, Motorola projected a surprisingly strong performance for the year, with earnings as high as 40 cents per share on $28 billion in sales. This, says Motorola, does not rely on a pickup in the economy. Laughter was suppressed only through the miracle of the listen-only technology on the conference call.

"We lowered our numbers last Friday, and we are lowering them again to 27 cents for 2003," says Bear Stearns analyst Wojtek Uzdelewicz. "And I believe even this will be hard to achieve. The industry has too much capacity and Motorola is losing market share."

A glance at the

Texas Instruments

(TXN) - Get Report

earnings report Tuesday helps illustrate the point, says Uzdelewicz, who has a neutral rating on Motorola and whose firm has no underwriting ties to the company. Texas Instruments reported better-than-expected wireless chip sales, while Motorola cut its 2003 chip growth forecast to 5% from 7.5%.

1941

With that kind of competitive lag becoming apparent, it's easy to see how Motorola's material is getting thin these days. Even as executives espoused the samurai qualities of so-called digital six sigma business processes, observers probably yearned for the gusto of a former time.

During a string of tough engagements over the past few years, Motorola used to knock them dead with one absurdity after another.

In 2001, executives asked "what liquidity crisis?" when Motorola had to pledge assets and sell investments to cover a potential cash shortfall. Then there was the side-splitting banker's routine the company used to do. That's when Motorola lent billions to sterling credit customers like

Telsim

, the Turkish telco that later defaulted on a mere $2 billion obligation.

Then there was the one involving

Iridium

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, the costly satellite phone project conceived by an executive's spouse who wanted phone access while vacationing on remote tropical beaches.

Lately, Motorola's moves have gone from the outrageous to the bizarre. Take the quixotic decision this week to pony up about $33 million to buy the remaining stake in

Next Level

(NXTV)

, then take it private. Next Level has already burned through $177 million of Motorola investments as it engineered broadband gear to deliver TV over phone lines.

Next Level's biggest, and perhaps eventually its only, customer was cash-challenged Denver telco

Qwest

(Q)

, which has since backed off on the orders.

Some investors, jaded by years of Motorola antics, took the latest earnings performance in stride.

"This is the same old Motorola," says one Wall Street hedge fund manager. "They shifted their accounting again, now that they are booking royalties as revenues, they were able to make their top-line number," says the money manager, who has no position. Motorola did not immediately reply to a call seeking comment.

"The point is, they are slipping, especially in the handset business," says the money manager. "

Samsung's

getting 25% operating margins on their handsets,

Nokia's

(NOK) - Get Report

getting 23% and Motorola is only getting low single digits."

To be sure, all great acts eventually decline. Come to think of it, Belushi's later work never rose to the levels he first hit with

Animal House

.