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Motorola wows after hours
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July 8, 1997: 7:56 p.m. ET
Excluding charge for shedding unit, telecom firm earns 62 cents per share
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NEW YORK (CNNfn) - Motorola lit up after-hours trading Tuesday when it posted second-quarter earnings of 44 cents per share, or $268 million, sending its stock up 3 percent.
Motorola's decision to phase out its DRAM chip unit -- announced last week -- pleased one market watcher, but forced the technology titan to take a charge of $170 million, or 18 cents per share. In the year-ago period, Motorola earned 54 cents per share, or $326 million.
"It does show that Motorola is willing to exit businesses that aren't performing according to their expectations," Bear Stearns analyst Andrew Cena said. "I think everyone should be happy tomorrow."
Excluding the charge, Motorola earned 62 cents per share.
The earnings turnaround for the cellular and computer products company came in part from the swing of the semiconductor market, Cena said.
"They got caught in a downturn in semiconductors last year," he said. "Now … they're benefiting from the upturn in semis. But more importantly, they're benefiting more than their peers."
The future looks brighter than ever, Cena said, because "investors will now focus on the fact that the second half of this year should be gangbusters for Motorola."
In trading on the New York Stock Exchange, Motorola (MOT) closed up 2-1/8 at 82-1/2. After the bell, the telecommunications firm added another 2-1/2 at 85 by 7 p.m., according to Instinet.
Also announcing results after the bell, Advanced Micro Devices climbed 3/4 to 38-1/2.
The chip maker posted second-quarter earnings of 7 cents per share, or $9.97 million, far short of analysts' expectations of 22 cents per share. In the year-ago period, AMD posted a net loss of $34.7 million, or 26 cents per share. AMD earlier this year released its K6 chip in an attempt to grab some of semiconductor leader Intel's market share.
In NYSE trading prior to the announcement, AMD dipped 1/4 to 37-3/4. Intel (INTC) moved little in after-hours trading. On the Nasdaq stock market Tuesday, it rose 2-1/4 to 49-5/8.
Although tech stocks showed strength late in the day, the Dow Jones industrial average may not show a similar swell. S&P futures trading on the Globex system lagged 0.25 to 927.55, indicating the Dow will open about 2 points lower on Wednesday.
A variety of companies made news late Tuesday, including department store retailer Montgomery Ward, which got a $300 million cash infusion from GE Capital Services to stay afloat during its bankruptcy reorganization.
The store said it has not determined how many stores or employees will be cut in the process. The privately held 408-store chain filed for Chapter 11 protection Monday.
In the hot medical and pharmaceutical sector, device maker Boston Scientific was downgraded by Dillion Read to "outperform" from "buy." In trading on the NYSE, Boston Scientific (BSX) surged 6-7/16 at 69-11/16 on a 25 percent jump in second-quarter sales. 
--Will Morton
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