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Tuesday, 9 October, 2001, 23:13 GMT 00:13 UK
Motorola losses continue
Motorola Global Headquarters Schaumburg, Illinois USA
Mobile phone maker Motorola has recorded a loss for the third quarter in a row.

It made a third quarter operating loss of $153m (105m). or seven cents a share, which was in line with analysts' expectations.

The company has been hit by the slowdown in the mobile phone industry and is in the process of cutting almost 22% of its workforce.

Motorola said the impact of the terrorist attacks in the US last month made forecasting "more challenging".

While it expressed hope that recent measures taken to boost the US economy would help, it said it was still difficult to predict when the economic turnaround would happen.

The company's shares had slipped $0.67 to $16.72 ahead of the release of the figures.

Handset profits

One piece of good news for Motorola came from its handset division, which made a profit during the third quarter.

But at its semiconductor division sales fell 48% from last year to $1.1bn (759m), while orders were down 49%.

Overall its operating loss for the third quarter came in at $153m (105m), whereas in the same period last year it made a profit of $643m (443m).

Including one-off pre-tax charges of $2bn ($1.38bn), the company's net loss was $1.4bn (966m), compared with a profit of $531m (366m) last year.

Sales for the quarter dropped to $7.4bn (5.1bn) from $9.5bn (6.6bn) last year.

Future prospects

Motorola's chairman and chief executive Christopher Galvin said the terrorist strikes on the US and its impact on the economy made predictions tricky.

"Until the unexpected and horrific atrocities of September 11 our predictive indicators seemed to indicate that the world would most probably return to more positive economic growth in the first or second quarter of 2002. These events make near-term forecasting more challenging," he said.

But he said the prompt action from the US Fed and government would help.

"We believe the unpredictability of future military and other responses associated with a global war on terrorism will be offset by the positive near-term stimulus of tax relief, interest rate reduction and a massive infusion of liquidity by government authorities."

Despite this he admitted that "calling the specific timing of a broad economic turnaround is difficult."

See also:

07 Sep 01 | Business
Motorola cuts more jobs
12 Oct 01 | Scotland
Motorola staff find new jobs
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