Motorola posts $174 m net profit

CHICAGO: Motorola has reported a fourth-quarter net profit of $174 million, or 8 cents a share, compared with a net loss in the year-ago quarter of $1.2 billion, or 55 cents a share.

Sales exceeded analysts' estimates and Motorola's own lowered forecast, but were in line with the company's original forecast.

Despite the disappointing first-quarter outlook, Motorola stood by its outlook for the full year, and investors pushed the stock up to $9.12 in after-hours trading on Instinet from Tuesday's closing price of $8.75 on NYSE.

Analysts said investors were ready to celebrate any good news, given the stock's almost 40 percent fall over the past year.

Excluding one-time items, it reported an operating profit of 13 cents a share, beating its forecast of 10 cents a share before one-time items. In the year-ago quarter, it reported a loss of $90 million, or 4 cents a share. Sales in the fourth quarter rose 3 percent to $7.5 billion from $7.3 billion last year, exceeding Motorola's forecast of $7.1 billion.

In October, Motorola had trimmed its earnings outlook for the fourth-quarter from 14 cents a share before one-time items. It also cut its sales outlook from $7.5 billion. "All in all it was net positive versus where the stock price was in the last month and a half," said Alex Vallecillo, senior portfolio manager at Armada Funds, which owns shares in Motorola.

"For the near term, we remain optimistic that modest sales growth can be achieved in 2003," Motorola Chairman and Chief Executive Christopher Galvin said in a statement. "The world economies are today showing some underlying signs of a rebound, which if not significantly disrupted by world events, could have a favorable impact on our markets as customers move towards renewing their capital spending," he added.

Motorola said it expects first-quarter sales in the range of $6 billion to $6.2 billion, and earnings per share in the range of break-even to 2 cents a share, on both a net basis and excluding items.

Analysts had been estimating first-quarter earnings before one-time items of 5 cents a share on sales of about $6.1 billion, according to research firm Thomson First Call.

However, the company stood by its October forecast of 2003 sales of $27.5 billion and earnings of 40 cents a share, both on a net and before-items basis. Analysts expect it to report sales of $27 billion and earnings of 38 cents a share, according to First Call. Sales were $26.7 billion last year.

© Reuters