News
Issue #2002 - 28 (July 2002)
(Updated July 23, 2002)

MARKET OUTLOOK & TRENDS

Motorola, Sprint PCS and Handspring Post Losses; Nokia & Nextel Show Modest Profit

1. Motorola posts a record $2.3 billion net loss
Motorola posted its biggest net loss (of $2.3 billion) in company history. Earlier Motorola had given an advisory indicating a $3.4 billion restructuring charge during the quarter. The loss this quarter compared with a net loss last year of $759 million, or 35 cents a share. The restructuring charge was largely for job cuts and asset write-downs. Motorola officials stressed that this quarter's loss completes the company's restructuring. However, Motorola said that it expects to achieve earnings of approximately $0.02 cents per share in the third quarter of 2002, and earnings of approximately $0.10 cents per share in the fourth quarter of 2002. These estimates are based on Generally Accepted Accounting Practices, which do not exclude special items. Motorola cut its estimates for industry-wide cell phone shipments in 2002 from 420 million to 400 million.

2. Sprint PCS posts Q2 $170 million loss
Sprint PCS today reported a loss of $170 million, or 17 cents a share, compared with a loss of $247 million, or 26 cents a share, a year ago. Despite the loss,the carrier saw revenue jump 32 percent. Sprint PCS added 308,000 new customers to its service, which was in line with its lowered forecasts. It said meeting its full-year target of 2.5 million to 2.7 million new wireless customers is "challenging but achievable."

3. Handspring reports net loss of $15.4 million
Handspring yesterday reported a fourth quarter loss of $15.4 million or 11 cents a share, compared with a net loss of $67.2 million or 60 cents a share a year ago. On the news the company's shares, down 74 percent this year, rose 10 percent in after-hours trading after an 8 percent rise during the regular session. The company has, over the last year, re-shaped its focus, moving its emphasis from the consumer PDA market to mobile enterprise data. The company's new product line, the Treo, combines wireless voice and data access in a single device. Handspring said that it hopes to achieve profitability by the end of this year.

4. Nokia posts $863 million Q2 profit, stock takes hit
Nokia today posted higher second-quarter profits in line with expectations. The company's profit of 80 cents to 84 cents (.79 to .84 euros) for 2002, was in line with a previous estimate of 83 cents. The company's overall profit, $863 million net, was up from a $589 million profit in the second quarter of 2001. Nokia shares bounced up and down after the statement, trading 3 percent lower at $14.01 in morning trade, after rising 3 percent earlier. Nokia shares have halved this year and have underperformed the Dow Jones tech index by around 10 percent. The stock is also about 80 percent off its June 2000 peak.
For more Nokia's Q2 results:

5. Nextel turns Q2 profit
Nextel Communications today said it turned profitable in its second quarter, driven by strong customer demand that translated to a 25 percent revenue increase. The carrier also said it expected 2002 operating cash flow of at least $3 billion compared with an earlier forecast calling for $2.5 billion. Nextel reported net income of $325 million, or 37 cents a diluted share, for the second quarter, compared with a loss of $426 million, or 56 cents a share a year earlier. Analysts on average had been expecting a loss of 24 cents per share.

MobileInfo Advisory & Comments: It is obvious from these profit and loss snapshots that wireless market is still under a lot of pressure from current economic climate. It may not be before 2003 that we start seeing some sunny sky.

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.