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Motorola chip unit slides into red

Reverses upward trend of past few quarters

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Motorola's semiconductor business is back in the red, after turning a profit for its last few quarters.

The company posted a loss of $121 million for the first quarter of 2003, compared to income of $18 million and $13 million for Q4 and Q3 of 2002, respectively. It lost $238 million in Q1 2002.

Motorola recorded sales of $1.2 billion for the 2003 quarter, up two per cent on the year-ago quarter, but down from Q4 2002's $1.3 billion. Q3 2002 also saw revenues of $1.2 billion. First quarter orders declined 16 per cent year-on-year, falling to $1.1 billion.

Motorola said its Q1 loss was down compared to the year-ago quarter, thanks to improving margins, the result of its shift toward fewer manufacturing facilities.

For the group as a whole, Motorola posted a profit of $169 million ($0.07 a share), on sales of $6.04 billion for the first quarter, compared to a loss of $449 million ($0.20 a share), on sales of $6.18 billion during Q1 2002.

Looking ahead, the company said it expects to see a slight increase in revenues, to between $6.4 billion and $6.6 billion. Earnings per share will fall, however, to $0.01-0.03 ($0.03-0.05 excluding special items), it admitted. ®

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