Motorola Broadband Sees Sales Drop - Multichannel

Motorola Broadband Sees Sales Drop

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It was another rocky quarter for Motorola Inc.'s broadband business, as sales
and orders continued to drop steeply.

The electronics giant's Broadband Communications Sector posted sales of $405
million, a 23 percent drop compared with the same quarter in 2002.

Orders dropped even faster, down 36 percent to $343 million compared with the
first quarter of last year.

Motorola blamed the declines in part on a shorter cycle time to deliver
products.

Earnings also dropped to $28 million versus $55 million posted for the first
quarter of 2002. While lower operating expenses helped to shore up the earnings
picture somewhat, Motorola is blaming the drop on the overall decline in
sales.

Motorola posted first-quarter sales of $6 billion overall, a 2 percent drop
compared with the prior first quarter. Earnings came in at 7 cents per share, an
improvement over the 20-cent-per-share loss in first-quarter 2002.

For the second quarter, Motorola is predicting that overall sales will drop 4
percent to between $6.4 billion and $6.6 billion.

The company hopes to bolster its broadband business in part through the
acquisition of Next Level Communications Inc. and its portfolio of
digital-subscriber-line-based video products. Motorola increased its stake in
Next Level to 89 percent through a tender offer last week, and it plans a
short-form merger to acquire the remaining shares.

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