Motorola net tumbles 32% in big surprise
Article Abstract:
An unexpected 2nd qtr 1996 drop in net income reported by Motorola has surprised industry analysts and sent stock prices down 15%. Motorola blames intense price competition in its major markets for a 32% decline in its net income for the quarter. Analysts expected a strong showing from the semiconductor and communications equipment vendor and had recently raised their earnings estimates. Demand for high-tech products remains high, but price wars are damaging the market. Motorola reported net income of $326 million for the quarter, compared with $481 million for 1995's same period. The company's stock price dropped from $66.50 to $56.50 after Motorola released the news. The largest loss was in Motorola's semiconductor business with a 34% drop in orders and 5% fewer sales resulting from a decline in orders from Apple and intense competition from Intel. The company is waging a price war in the cellular phone market, and the results began to show in this quarter.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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Motorola posts first-quarter net of $384 million, above estimates
Article Abstract:
Motorola posts 1st qtr 1996 net earnings of $384 million, a slight increase from the expectations of industry analysts and 1st qtr 1995 profits of $372 million. Motorola's increased profit comes directly after a weak 4th qtr 1995 in which the company's semiconductor and cellular phone sales were less than expected. Analysts largely attribute the rebound to Motorola's stringent cost-cutting measures. Despite an after-hours increase in the trading price of Motorola's shares, analysts do not expect the financial report to significantly affect the company's stock prices. While the profit margins in Motorola's cellular equipment and semiconductor business segments declined, the company's messaging unit sustained an impressive 26% rise in sales.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
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