Motorola Inc.’s shares settled Thursday after jumping more than $4 Wednesday amidst rumors Siemens AG was considering buying the telecommunications giant.
Motorola shares closed Thursday at $58.25, down $1.13. Trading on the New York Stock Exchange Friday was in the $58 range.
Analysts have noted Motorola is weak in the wireless switching arena and may be searching for a partner with strong switching expertise. Alcatel Alsthom has been cited as another candidate to partner with the Schaumburg, Ill., wireless equipment manufacturer.
“There’s only one flaw with the Siemens rumor: Siemens couldn’t afford Motorola,” said Alex Cena, telecommunications equipment analyst with Lehman Brothers Inc. in New York.
Cena noted that another partnership may not be wise for Motorola because it is struggling to keep profitable the many businesses it already operates.
“The switching weakness is a matter of needing more focus. Motorola either needs to sell its semiconductor business and focus on telecom or vice versa … They need to get their house in order first.”
Indeed, Motorola’s financial outlook appears gloomy for 1998. The company does not expect sequential earnings improvement throughout the year and has said that a restructuring effort is on the horizon.
