Motorola Profits From Cutbacks
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This 2.4 percent operating profit margin is a marked improvement on its fourth-quarter 2002 margin of only 0.3 percent and is delivered against a 2 percent fall in sales (see Motorola Q1 Sales Slip 2%).
Today’s figures reflect the strides the U.S. vendor is making in its efforts to counteract the telecom downturn, following several rounds of financial cutbacks (see Motorola Cuts Debt by $900M) and unimpressive product launches (see Moto Fails to Inspire and Motorola Lags Rivals).
Motorola CEO Christopher B. Galvin today stated defiantly that he expects the infrastructure side of his business, along with all the company’s other segments, to have positive operating earnings in 2003 and to generate positive operating cash flow.‚ÄĚ
Unstrung Insider’s April report — “Financial Healthcheck: Top Ten Wireless Equipment Vendors” — has Motorola listed as one of the market’s most improved infrastructure players over the past year. ‚ÄúThe growth in net income is especially positive,‚ÄĚ says Gabriel Brown, author of the report. ‚ÄúMotorola is the clear number two in the final rankings — behind Nokia Corp. (NYSE: NOK). The company scored highly in many key areas, and is probably the most improved business overall.‚ÄĚ The table below indicates the extent of Motorola’s improvements: