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Updated from 12:35 p.m. ET

Just last week,



held a half-day of meetings with investors and analysts. Though it didn't provide additional information on estimates for the fourth quarter and next year, analysts came away with the impression that everything was on track.

What a difference nine days make.

For the second time in eight weeks, Motorola

announced Thursday that it will fall short of sales and earnings projections in the next two quarters -- and next year -- because of cost issues in its cellular handset business and falling demand in its semiconductor business, its two largest segments in terms of revenue.

Some of the biggest names in technology have also been hit by profit warnings of late, including





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The company, which makes a wide range of electronic equipment and components, now expects fourth-quarter earnings of 15 cents per share, excluding special items, and sales of $10 billion. The new per-share figure is considerably less than the 27 cent per share consensus estimate of analysts polled by

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. The revenue figure is 5% lower than the $10.5 billion consensus estimate.

Schaumburg, Ill.-based Motorola also lowered expectations for first-quarter earnings per share to 12 cents (almost 50% lower than the consensus estimate of 23 cents) and first-quarter sales to $8.8 billion (11% lower than consensus).

But that's not all. Full-year 2001 estimates will be lowered as well when the company announces its earnings results for this year. Currently, Motorola's estimates stand at $44 billion in sales and earnings per share of $1.20, while the consensus estimates stand at $43.9 billion in sales and earnings per share of $1.18.

For the fourth quarter, the handset business is responsible for a large part of the decline in earnings, while the semiconductor business takes the blame for the revenue gap.

Taken together, the two downward revisions have brought fourth quarter earnings per share down 59% since October, from 37 cents a share to 15 cents a share. "The numbers aren't believable anymore," said Todd Bernier, a stock analyst with

. ( doesn't rate stocks or perform underwriting.)

As disappointing as the news is for investors, it's even more jarring when contrasted to competitor


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bullishness of two days ago. "Nokia is making money hand over fist," Bernier said. "What is it that is so different that Motorola can't make money on this?"

The company's personal communications segment suffered from delays in implementing a cost-reduction program begun in the third quarter, but its problems had nothing to do with a lack of demand for handsets, Motorola said.

"Part of this is just simply the timing of bringing in lower-cost negotiated material. It's coming in a little later than forecast," Robert Growney, president and chief operating officer, said on a conference call.

An inventory backlog isn't helping matters. At the beginning of 2000, Motorola estimated it would sell 100 million phones during the year, according to John Dryden, an analyst at

Chase H&Q

. It will end up selling 70 million to 75 million. Meanwhile, a component shortage early in the year forced the company to pay higher prices for those components.

"Reducing inventory at higher component costs leads to lower

profit margins," Dryden notes. Motorola didn't say anything about operating margins for the fourth quarter but had previously said a 6.5% margin was the goal. (Chase H&Q rates Motorola a buy, and the firm has done no underwriting for the company.)

The lack of a decline in demand indicates that handset sales in dollar terms will remain healthy, but the lower margins will hurt earnings.

Motorola emphasized that it continues to expect worldwide mobile-phone sales of 420 million in 2000 and 525 million to 575 million in 2001. However, those numbers -- announced in October -- are trimmed down considerably from its earlier estimates of 425 million to 450 million for this year and 600 million for next year.

On the other hand, the woes in the semiconductor business -- largely responsible for the $500 million revenue shortfall in the fourth quarter -- are industry-wide. "This is a macroeconomic problem that has affected all semiconductor companies, including Intel," explained Bernier at Morningstar. "All the PC makers are falling over dead and all the computers need chips."

All other segments of the company's business are expected to be in line with expectations.

Shares of Motorola dropped 6 cents to $17.75 Thursday.