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Motorola beats Street
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October 5, 1998: 6:26 p.m. ET
Cost savings from restructuring program lift 3Q operating earnings
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NEW YORK (CNNfn) - Struggling technology giant Motorola Inc. Monday easily beat third-quarter earnings forecasts as the company said its broad restructuring initiatives are beginning to show dividends.
The Schaumburg, Ill.-based company reported third-quarter operating profits of $40 million, or 7 cents a share, on $7.2 billion in sales, soaring past First Call estimates of a profit of 1 cent a share for the quarter.
Motorola's results were off significantly from its year-ago operating earnings of $308 million, or 51 cents a share, on $7.4 billion in sales as economic conditions in Asia and weakness in the semiconductor and paging markets continue to plague the company.
The company also reported charges of $117 million, or 14 cents a share, including a write-off relating to its acquisition of Starfish Software. Including the charges, Motorola reported a loss of $42 million, or 7 cents a share.
Motorola said it is beginning to see the results of the major restructuring plan it announced earlier this year. As part of the plan, in June the company announced it would cut 15,000 jobs, or 10 percent of its workforce, over a 12-month period. Motorola took a $1.98 billion charge in the second quarter for the restructuring.
Robert Growney, Motorola president and chief operating officer, said the company's cost-reduction, manufacturing consolidation and restructuring programs resulted in $140 million in savings in the third quarter.
"The program is on track to achieve its goal of an annualized savings rate of at least $750 million by mid-1999," Growney said.
Motorola (MOT) shares closed at 38-9/16, off 1-7/16, before shooting up to 41 in after-hours trading. 
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Motorola
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