A series of write-down charges and dropping sales combined in a wicked way
for Motorola Inc., resulting in a record net $2.3 billion loss ($1.02 per share)
for the second quarter.
The Schaumburg, Ill.-based electronics manufacturer reported that sales
overall dropped to $6.7 billion, compared with $7.3 billion posted for the same
quarter in 2001.
But the big hit came from previously announced one-time charges. That
included $1.9 billion to write down and restructure its
semiconductor-manufacturing facilities and $1.1 billion in write-downs of
investments and other assets. Another $530 million in long-term financial
receivables was written off.
Without those charges, Motorola would have posted a $48 million profit.
Motorola Broadband Communications Sector also had a rough quarter, with sales
down 32 percent to $554 million and orders dropping 45 percent to $420 million
as MSO-subscriber-equipment purchases continue to slow.
Orders in particular were affected by a reversal in existing backlog and the
loss of bankrupt Adelphia Communications Corp.'s business. Given Adelphia's
plight, Motorola expects short-term sales to 'be negatively impacted,' according
to the financial release.
Overall, the broadband unit posted a $304 million operating loss, compared
with a $55 million gain a year ago.
There was no mention of any financial impact from the recent recall of
defective 'DCT-2000' digital set-top boxes.