Motorola Inc, the second-largest maker of mobile phones, had a US$759 million loss in the second quarter as revenue dropped 19 percent on a slump in customer demand.
The loss was US$0.35 a share, compared with net income of US$204 million, or US$0.09, a year earlier. Excluding reorganization and other charges, the loss would have been US$0.11 a share, Motorola said in a statement. That compares with the US$0.12 average loss estimated by analysts polled by First Call/Thomson Financial. Sales fell to US$7.52 billion.
The shares rose 6.2 percent in after-hours trading because phone sales beat estimates and the loss was narrower than expected, analysts said.
Schaumburg, Illinois-based Motorola lost more market share since ceding the top spot to Nokia Oyj in 1998.
"They're moving in the right direction" in mobile phones, said SG Cowen analyst Scott Searle, who rates Motorola a "buy."
Orders of US$2.9 billion for phones, pagers and two-way radios exceeded revenue of US$2.5 billion.
Motorola shares rose US$0.17 to US$15.67 in regular US trading on Wednesday and climbed US$0.97 to US$16.64 after the announcement.
They've declined 23 percent this year, compared with a 61 percent drop in the Standard & Poor's Communication-Equipment Manu-facturers Index.
Chief Executive Christopher Galvin, grandson of Motorola's founder, has since December announced plans to eliminate 26,000 jobs, or 18 percent of 147,000 positions at the end of 2000. Of those, 13,000 jobs had been eliminated by the end of March.
Some investors say Galvin's job may be in jeopardy if he can't boost sales and profit while rivals do.
"They're managing for a recession, and that shows in the quarterly results," said Matthew Hoffman, a Wit SoundView analyst who has a "buy" rating on Motorola.
Wednesday, Galvin was upbeat on parts of the business. He said in a statement that the wireless-phone business "is already beginning to show signs of recovery" and the industry's chip sales "should resume a double-digit growth pattern next year."
The company had a US$619 million reorganization charge, a US$742 million gain from sales of investments and businesses, and US$293 million in "other charges," according to a statement. These resulted in an after-tax charge of US$0.24 a share, the company said.
Sales declined in five of Motorola's six main businesses.
The biggest drops were in semiconductors, where revenue plunged 38 percent to US$1.25 billion, and in the personal communications unit, which makes phones, pagers and two-way radios. Sales there dropped by one-fourth to US$2.5 billion.
Hoffman said a positive sign was an increase in orders for the personal-communications business to US$2.9 billion from US$2.8 billion a quarter ago.
Still, "the semiconductor business is weaker than I thought," Hoffman said. Chip orders plunged 51 percent to US$1 billion, the company said.
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