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Tuesday, 15 October, 2002, 22:15 GMT 23:15 UK
Mixed news for tech sector
An Intel plant
Intel said the IT sector is still struggling
The tech sector has received mixed news from the latest set of US corporate results.

Earnings at chip maker Intel were up on last year, but came in lower than analysts' expectations.

Intel's shares had risen by more than 9% on Wall Street ahead of the results, but in after-hours trade they tumbled from their closing price of $16.52 to $14.70.

But the world's second-largest mobile phone maker Motorola reported a third-quarter profit, ending a run of six straight quarters of losses.

Despite earnings being slightly higher than expected, Motorola shares slipped to $9.95 in after-hours trading, after having closed at $10.10 in normal trade.

Intel disappoints

Intel said net income for the three months to late September rose to $686m (443m), or 10 cents a share, up from $106m, or 2 cents a share, in the same period last year.

Excluding one-off items, Intel said it earned 11 cents a share, slightly less than the 13 cents a share which analysts had been forecasting.

Revenues for the quarter were $6.5bn, slightly down on last year's figure of $6.55bn.

The company said revenue during the fourth quarter should come in at between $6.5bn-$6.9bn.

Gloomy outlook

The slowing in demand for new personal computers has hit chip makers, who have seen growth rates drop sharply since the late 1990s.

And Intel said the information technology sector was still showing no signs of improvement.

"As long as have a soft market, earnings are going to be lower than we would like," Intel's chief financial officer Andy Bryant told the Reuters news agency.

"The economy is still not recovering in our industry," he added.

Back in the black

Motorola's return to profit was helped by a better performance from its mobile phone unit.

Motorola's handset saw earnings rise despite lower sales
The company reported a third-quarter net earnings of $111m, or 5 cents a share, compared with a net loss of $1.4bn in the same period last year.

Excluding one-off items, the earnings figure was $141m, or 6 cents a share, slightly above the 5 cents a share which had been expected.

Despite the return to profit, sales fell to $6.4bn for the quarter, down from $7.4bn last year.

Sales at the handset unit dropped 2% to $2.6bn, but net earnings rose to $241m compared with a loss of $233m in 2001.

Profits were also seen at Motorola's semiconductor business, which recorded a net profit of $13m, compared with a $418m loss last year.

"They obviously did very good on the bottom line. Handsets were enormously profitable which is a good sign," said JP Morgan analyst Ed Snyder.

Bumpy recovery

Motorola's chairman and chief executive Christopher Galvin said he thought there would be an economic recovery but that it could take a rather erratic path.

"We believe there will be recovery," he said.

"We also believe most of the markets we serve will experience upward growth over the next several years."

But he added: "Rather than a slow but steady quarter-to-quarter upward trend in global economic growth, it appears now that an irregular short-term up and down economic growth pattern may emerge quarterly."

See also:

16 Jul 02 | Business
07 Jun 02 | Business
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27 Jun 02 | Business
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19 Jun 02 | Business
17 Apr 02 | Business
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