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Motorola 3Q on target
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October 12, 1999: 6:32 p.m. ET
Led by strong digital wireless sales, MOT matches analysts' profit estimates
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NEW YORK (CNNfn) - Motorola Inc. reported a third-quarter profit right in line with Wall Street estimates Tuesday, driven by a strong turnaround in its personal communications business.
The Schaumburg, Ill.-based firm logged earnings of $332 million, or 53 cents a share, before special items for the three months ended Sept. 30., matching the consensus analyst estimate compiled by First Call Corp.
The performance marked a substantial improvement over the $40 million, or 7 cents per share, Motorola earned in the year-ago quarter. Total revenue for the quarter rose 7 percent to $7.2 billion
Motorola made its earnings announcement after the market close.
Motorola (MOT) shares closed down 1-11/16 to 95-15/16 prior to disclosing its earnings.
Digital phone sales lead the way
Much of the company's growth came from its personal communications segment, which saw revenues jump 37 percent to $3.1 billion during the quarter on the strength of digital wireless phone sales.
Overall, orders increased 67 percent -- led by strong demand in Asia -- to $4.3 billion. Operating profits totaled $140 million compared to a $55 million loss a year ago.
But while digital phone sales soared, accounting for 89 percent of all of Motorola's wireless sales during the quarter, pager and analog sales declined significantly due to weaker demand in all regions.
Digital phone sales were aided by a $250 million agreement with Sprint PCS to provide digital wireless telephones and accessories.
A decline in satellite communications equipment revenue nearly cut Motorola's operating network systems profit in half during the quarter, while the company's satellite communications group revenues were down significantly due to the firm's association with financially troubled Iridium LLC.
Fourth quarter outlook
Motorola Chairman and Chief Executive Officer Christopher Galvin said with overseas financial markets continuing to improve, he expects the company's sales and earnings growth to continue as the company's new products hit the market.
The company will also be helped by its recent acquisition of cable-television equipment maker General Instrument Corp. (GIC) for approximately $11 billion in stock. Motorola -- already the world's largest provider of cable modems -- agreed to acquire GIC during the quarter in a deal designed to boost Motorola's offerings in Internet, telecommunications and entertainment services as cable and Internet networks converge.
The company suffered a setback, however, when Apple Computer Inc. (AAPL) said it would not meet its fourth-quarter estimates because production problems at Motorola resulted in a shortage of PowerPC G4 chips, which Motorola develops for Apple's Power Macintosh computers.
The company did not address the Apple situation in its earnings release. A conference call with analysts and reporters is scheduled for Wednesday morning. 
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Motorola
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