Motorola cuts earnings forecast; stock tumbles
Motorola, Schaumburg, Ill., said today it now expects fourth-quarter 2002 sales of $7.1 billion. The company’s previous guidance for the fourth quarter of 2002 was for sales of $7.5 billion.
Investors reacted negatively to the reduced forecast as shares in the company’s stock tumbled $2.25 to close at $7.85, a 22 percent drop and the lowest price for Motorola stock since 1982.
Motorola said that it expects sales for the full year 2003 to be $27.5 billion.
“If sales are at this level, earnings of 40 cents per share for the full year 2003 are achievable, barring any unforeseen political or economic disruptions or other events that cause the company to record special items of expense or income,” a statement from the company reads.
The company’s previous guidance for the full year 2003 was for sales of $29 billion and, with sales at that level, that the consensus estimate of earnings of 45 cents per share was achievable.
The company’s lowered revenue and earnings guidance is driven by slowing industry demand in a number of the company’s end markets, in particular the wireless infrastructure, broadband and semiconductor businesses.