In tune with lowered expectations, Motorola Inc.’s fourth-quarter earnings dropped, confirming fears of an industrywide slowdown.
Including special items, its net income dropped 58 percent to $135 million, or six cents per share, from $323 million a year ago. Excluding special items, its profits declined 41 percent to $335 million, or 15 cents a share, against $564 million, or 25 cents a share, a year earlier.
But its sales jumped 11 percent to $10.06 billion from $9.08 billion for 1999. For the full year, net income leaped 48 percent to $1.32 billion, or 58 cents per share, in contrast with $891 million, or 41 percent a share, for 1999.
It also reported a net charge of $68 million pre-tax, or nine cents per share.
“Despite the higher sales, increases in manufacturing costs and operating expenses caused operating profits to decline,” said Robert L. Growney, Motorola’s president and chief operating officer.
The company in December cut its fourth-quarter earnings forecast by 40 percent, owing to a decrease in cell-phone sales and a decline in its semiconductor business. It had earlier revised its expectations last October.
The prospects are still dim as the company warned that a slowing semiconductor market and order growth for cell phones will continue to slide. It reported a 20-percent decline last year.
Although Motorola expects sales of wireless phones in 2001 to be between 525 million and 575 million, which is an increase of more than 410 million for 2000, it estimates its sales will come down on the lower end of the prediction.
The company does not expect business to accelerate until the second half of 2001.
“We do not expect to see significant improvements in the next three to six months,” commented Mike Zafirovski, president of Motorola’s personal communications division.
