Wireless hardware manufacturer Motorola Inc. reported on Wednesday that it plans to close four more semiconductor plants over the next nine to 15 months.
The news follows the earnings report Tuesday in which Motorola reported its fourth consecutive quarterly loss--a $1.2 billion net loss and $90 million operating loss for the fourth quarter. This compared with a profit of $362 million in the same period a year ago, which was the companys last profitable quarter. This was the companys first full annual loss since 1930.
Company officials said that the losses are likely to continue for the first half of 2002, but that the company should be profitable in the second half of the year, with improved handset sales and continual cost-cutting throughout the year. Officials did not say where the future cuts would come from.
"2001 will go down in the history of the global telecommunications equipment and semiconductor industries as one of the most difficult years," said Christopher Galvin, chairman and CEO of the Schaumburg, Ill., company. "The global recession, which we began to anticipate in the third quarter of 2000, began in earnest in early 2001, hurting many strong businesses, especially those involved in telecommunications and semiconductors. The events of Sept. 11 compounded the impact.
"That stated, while we expect to incur losses in the first and second quarters of 2002, we expect to return to profitability in the second half of the year and be profitable for the full year, barring any unforeseen political or economic disruptions," Galvin added. "Motorola has continued to position its cost structure, R&D investments and manufacturing capacity for both an expected modest economic recovery in the second half of 2002 and the expected revitalization of our strategic markets."