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Motorola issues profit warning

Sales, earnings lower than expected - again

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Motorola isn't going to garner as many sales this quarter - the first of the current fiscal year - as it had hoped, the company admitted today.

Citing "weakness in first-quarter order input across its business segments", Motorola said its previous sales target of $8.8 billion and earnings expectations of 12 cents a share just aren't going to happen.

The Great Satan of Car Radios blamed the US economic downturn for the greater-than-expected dip in Q1 orders. It also noted that the "inventory corrections taking place broadly in technology markets worldwide" hadn't helped either. Essentially, with fewer PCs and related goods sold in the Christmas period, manufacturers have carried unsold kit over into January and February, resulting in fewer parts orders from the likes of Motorola.

That's one of the reasons why Motorola doesn't expect the world chip business to grow by more than 15 per cent this year - it will probably be closer to ten per cent, according to the company's most recent predictions. The Q1 profit warning many force Motorola to change its prediction, reducing growth to single figures.

Certainly, that's the outlook US semiconductor market research company VLSI has. It reckons growth will be down to around 1.2 per cent - way, way lower than all other industry forecasts. ®

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