Revenue at Motorola Broadband Communications Sector is expected to rise
significantly in the first quarter, but order growth is projected to practically
grind to a halt as cable operators continue to meet demand for new services by
using existing inventories.
'First-quarter orders will show little if any growth due to tighter
inventory-management practices and a reduced rate of new-subscriber growth,'
Motorola Inc. president Robert Growney said in a conference call with
analysts.
Growney was speaking to analysts after Motorola warned that its first-quarter
earnings would fall short of expectations, mainly due to decreased demand for
its cellular-telephone equipment. The company said it expects to report an
operating loss in the first quarter, rather than the profit it had earlier
predicted.
Growney said the company has been aggressively reducing costs -- it announced
the sale or closure of six plants last year -- and it is in the final stages of
doing the same for an additional four facilities. Three other plants could face
the same fate, he added.
'Some of the businesses are in free fall when you look at the rates of
change,' Growney said. 'We will probably have to go through multiple
changes.'
Motorola stock dropped $1.04 each, or 6 percent, to $16.25 per share Friday.
