NEW YORK-As expected from its advance warning last month, Motorola Inc. last week reported lower sales and earnings for the third quarter of 1996 when compared with the same period last year.
Motorola said its sales for the quarter, which ended Sept. 30, declined 5 percent to $6.5 billion from $6.9 billion in the third quarter of 1995. However, when the first three quarters of 1996 are considered cumulatively, Motorola’s sales actually increased by 3 percent to $20.3 billion, compared with the first nine months of 1995.
Net margin on sales was 3.2 percent in the third quarter, compared with 7.2 percent a year ago. In the first nine months, net margin was 4.5 percent, compared with 6.8 percent in the same period last year.
Third quarter earnings dropped by more than half to $206 million, compared with $496 million during the same period last year. For the first nine months of 1996, earnings totaled $916 million, vs. $1.35 billion for the first three quarters of 1995.
Motorola reported 1996 third quarter earnings fell to 34 cents per share of common stock on a diluted basis, down from 81 cents per share earned during the same period last year. According to First Call, a consensus of securities analysts had estimated earnings of 35 cents per share in the third quarter.
Motorola attributed the decline in third quarter earnings to several key factors: the recession in the semiconductor industry; competitive pressures and continuing price declines in the cellular telephone, paging and modem businesses, and the ripple effect of these declines on sales and order patterns for related component products.
Motorola said it plans to expand its cost-cutting actions, including layoffs, during the fourth quarter, which will negatively affect fourth quarter earnings.
