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Motorola beats estimates
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January 13, 1999: 6:54 p.m. ET
Strong cellular phone sales, restructuring programs boost 4Q profits
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NEW YORK (CNNfn) - Mobile telecommunications giant Motorola Inc. Wednesday reported fourth-quarter earnings ahead of Wall Street forecasts amid strong sales of digital cellular phones and the continuing positive effects of its broad restructuring program.
The Schamburg, Ill.-based company reported a fourth-quarter profit of $159 million, or 26 cents a share, on $8.34 billion in sales. Analysts expected Motorola (MOT) to post earnings of 23 cents a share.
But the company's earnings fell far short of last year's fourth-quarter, when it earned $321 million, or 53 cents a share, on $8.28 billion in sales.
Motorola had been struggling mightily in 1998 as analog cellular phone sales slumped. The company was also a victim of the semiconductor industry's problems and Asia's financial crisis through much of the year.
But Motorola began staging a comeback in the third quarter as its broad restructuring initiatives began producing tangible financial results.
Robert Growney, Motorola president and chief operating officer, said the restructuring programs boosted the company's fourth-quarter profits by about $210 million. He added the restructuring may achieve an annualized rate of $1 billion in profit improvement by mid-1999. Motorola's original goal was to boost profits by $750 million.
Last June, Motorola announced it would cut 15,000 jobs, or 10 percent of its workforce, over a 12-month period.
In a statement, the company said it now expects the total number of job cuts to reach 18,000, as 17,000 employees had already left the company by the end of 1998.
Motorola said sales in its cellular products segment rose 7 percent to $3.9 billion in the fourth quarter while orders increased 13 percent. Full-year operating products for the segment, however, fell to $482 million from $1.3 billion.
The company reported year-over-year sales and orders declines in its semiconductor products segment, though both grew 7 percent sequentially from the third quarter.
For the fiscal 1998 year, Motorola posted a loss of $962 million, or $1.61 a share, on $29.4 billion in revenue, well off 1997 earnings of $1.2 billion, or $1.94 a share, on $29.8 billion in revenue. Motorola's 1998 loss includes $1.9 billion, or $2.19 a share, in charges related to its restructuring programs.
Motorola shares closed at 70-7/8, up 3-3/8 in Wednesday trade. 
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Motorola
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