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Motorola shares drop
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January 18, 2000: 10:39 a.m. ET
Stock falls despite on-target profit; revenue growth disappoints analysts
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NEW YORK (CNNfn) - Shares of Motorola Inc. fell more than 4 percent at Tuesday's opening bell even though the company's 1999 fourth-quarter earnings beat Wall Street targets.
In early morning trading, Motorola shares declined 6-9/16 to 144-7/16. The drop follows Monday's fourth-quarter earnings announcement, in which the company reported that profits more than tripled on higher demand for its digital phones and a strong computer chip market.
Though Motorola (MOT) reported sales of $8.5 billion, some analysts had expected the number to be around $8.6 billion, and the company cited a shortage in wireless components for adversely affecting sales.
"If it hadn't been for the component situation we would have had several hundred million more in revenue for the quarter," Motorola's executive vice president and president of communications enterprise Merle Gilmore told analysts in a conference call Tuesday.
However, Gilmore stressed that Motorola took "pro-active steps with its supply base," has a record number of back-orders, and expects sequential growth from the fourth quarter of 1999 to the first quarter in 2000.
In the conference call, the number two wireless phone producer outlined projections for the first quarter and full year 2000.
For the first quarter, Motorola projects revenue of $8.4 billion and earnings of 57 cents per share. The figures include results from General Instrument Corp., the television set-top box maker it acquired earlier this month for $17 billion.
Full-year revenue was forecast at $37.3 billion and earnings per share at $3.12.
Due to the General Instrument merger, first-quarter profit will be diluted by 3 cents per share, Motorola said, but full-year earnings won't be affected. The first quarter forecast of 57 cents includes the 3 cents dilution.
The company's forecasts matched Wall Street earnings estimates according to First Call.
Schaumberg, Ill.-based Motorola also raised its global chip industry growth target to 20 to 25 percent from its earlier outlook of 15 to 19 percent and said growth prospects for 2001 look similar. 
-- from staff and wire reports
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Motorola
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