Motorola Sees Return to Profit

Wireless technology giant Motorola Inc. Wednesday said it expects to return to profitability in the third quarter and exceed analysts' current consensus estimate for the full year.

The Schaumburg, Illinois-based company said it believes it can exceed analysts' consensus estimate of a 4-cent-a-share profit for the full year and could even earn 15 cents a share, excluding special items.

It said it expects a loss of 11 cents to 14 cents, excluding one-time items, in the first quarter on sales of $6 billion to $6.1 billion.

Analysts on average were expecting a loss of 12 cents according to Thomson Financial/First Call, with loss estimates ranging from 8 cents to 15 cents.

Motorola still expects sales from ongoing operations to fall 5 percent to 10 percent in 2002 compared with 2001.

The company Tuesday posted its fourth consecutive quarterly loss as expected, reflecting a slowdown in customer spending.

The company also said on Wednesday the mobile phone industry entered 2002 with a higher inventory than expected.

"It's important to point out that we've entered 2002 with industry inventory channels a bit higher than normally expected at this time of the year," Mike Zafirovski, president of Motorola's personal communications sector, which makes mobile phones, said in a conference call with analysts.

Higher inventory means that mobile phone makers will have to sell those phones first before they can record new sales.