NEW YORK-Motorola Inc., Schaumburg, Ill., reported higher sales and earnings for the fourth quarter of 1997 and for all of last year, but slightly below analysts’ expectations due to the unsettled condition of its Asian markets.
Christopher Galvin, chief executive officer, said the company expects overall sales to be about 10 percent higher during the first two quarters of 1998 compared with the same quarters last year. These projections assume that cooperation among many nations and the International Monetary Fund will stabilize the financial problems in Asia, he said.
“Despite the current conditions in Asia, the region continues to represent a solid long-term growth opportunity for Motorola. The economic restructuring that is occurring in countries such as Korea should help to promote sustained growth in the future,” Galvin said.
“Moreover, Motorola’s manufacturing presence in Asia should help lessen the impact of expected lower economic growth and greater pricing pressures from the region.”
Galvin also said that economic growth in Latin America is “very strong,” that the United States is experiencing a “steady expansion” and that growth in Europe is “accelerating.”
Sales for the full year rose by 7 percent to $29.8 billion. Earnings totaled $1.18 billion, up from $1.15 billion in 1996. Earnings per share were $1.94, up four cents during 1996.
Fourth-quarter sales were $8.3 billion, an 8 percent increase compared with the same period a year earlier. Earnings were $321 million, vs. $238 million during the last quarter of 1996. Earnings per share were 53 cents, up from the 39 cents per share earnings of fourth-quarter 1996.
For the full year in all of its businesses, Motorola’s net profit margin on sales was 4 percent, a slight decrease from the 4.1 percent margin recorded for 1996. The company reported a fourth-quarter net margin of 3.9 percent in 1997, up from 3.1 percent during the same period of 1996.
Cellular Subscriber Sector sales increased by 10 percent to $11.9 billion last year and orders rose by 9 percent, said Robert L. Growney, president and chief operating officer.
During the last quarter of last year, sales rose by 18 percent to $3.6 billion compared with the fourth quarter of 1996. Sales increases in Europe and the Americas offset decreases in Asia. Orders increased in Europe and Asia while remaining flat in the Western Hemisphere.
Motorola’s Cellular Infrastructure Group also posted higher sales during the latest complete quarter, led by increases in Asia, particularly Japan, and the Americas. However, orders declined, as higher numbers of orders in the Pan-American region were offset by lower orders in Europe and Japan and significantly lower orders in other parts of Asia.
The company’s Semiconductor and Land Mobile Products segments also posted higher sales and orders for the year and the latest quarter, but profits were mixed. Semiconductor profits rose for the quarter but declined for the year, this due to a charge taken so that Motorola could exit the Dynamic Random Access memory market.
