Motorola profit warning

Bad news from the headquarters of Motorola

Motorola has issued a profits warning and said it may even make a loss in the first quarter of this year.

The company added that this was due to slowing growth and not because it had lost market share.

The warning is the latest from companies in the hi-tech sector signalling a severe slowdown in the US economy.

"We believe that this weakness is the result of current industry-wide conditions and not a loss in market share," said Robert Growney, President and Chief Operating Office of Motorola.

More bad news

Motorola reported a big slowdown in orders across its business lines. When reporting its quarterly financial results in January, the company had warned that there was slack demand in the personal communications and the semiconductor sectors.

Mr Growney described the semiconductor business as being "in free fall mode".

He could not give an overall assessment of the company's full year results, describing the industry as "too volatile", but added that the US economy was "certainly in recession already".

Warning could mean more job losses

He said the slowdown was not just restricted to the US but also "bleeding very quickly into Europe". Motorola's Asian business has also been badly affected.

Last month, Motorola reported earnings 41% lower than the previous year, but in line with analysts' expectations. It also announced that about 2,500 employees would lose their jobs within the next six months.