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Motorola Expects 2nd Annual Loss

April 04, 2002|From Bloomberg News

Motorola Inc., the world's No. 2 maker of mobile telephones, will have a second straight annual loss this year after accounting for costs related to unspecified "special items."

The company "does not expect to be profitable in 2002 inclusive of these charges," according to a regulatory filing made last week. Last year, net expenses for items such as employee severance, bad loans and gains from selling units totaled $3.3 billion, contributing to a loss of $3.94 billion, or $1.78 a share.

Motorola said it will be profitable without such items, repeating forecasts from December and January. Analysts have criticized the company for not classifying certain items as operating costs, excluding them from results promoted to investors over those using generally accepted accounting principles.

"It's hard to get excited ... when you see those recurring charges," said Bear, Stearns & Co. analyst Wojtek Uzdelewicz, who rates the stock "neutral" and doesn't own shares. "Until we see clean numbers coming out, it's hard for me to upgrade the stock."

The shares of Schaumburg, Ill.-based Motorola fell 30 cents to $14.25 on the New York Stock Exchange. They have declined 5.1% this year.

Spokesman Scott Wyman said Motorola has "not identified the amount of the special charges." The company may give more details in its quarterly conference call scheduled for April 17, Wyman said. When including the special items, Motorola's results conform to GAAP, he said.

Pretax reorganization expenses totaled $1.86 billion in 2001 as Motorola shed 36,000 jobs, or about a fourth of its work force.

Motorola had $3.33 billion in pretax special items termed "other charges." They consist of $1.5 billion in potentially bad loans, mainly to a Turkish wireless operator that's in a legal dispute with Motorola; $398 million in costs for legal and arbitration settlements; and $1.2 billion to write down the value of investments.

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