Motorola issues profit warning

Speculation is rife that Motorola CEO Ed Zander may be about to step down after the company issued a profit warning yesterday.

  • E-Mail
By  Administrator Published  July 12, 2007

Speculation is rife that Motorola CEO Ed Zander may be about to step down after the company issued a profit warning yesterday.

Motorola warned investors it would post a net loss from continuing operations ranging from two cents to four cents per share on sales of US$8.6 billion to US$8.7 billion in its second quarter results, which are due out on July 19.

Investors have been putting pressure on Zander, who has held the top job since January 2004, to resign, and this week's profit warning is likely to add to this, analysts said.

"With this type of performance and the bleak prospects facing the company for the rest of the year...I don't think Zander's tenure is going to go much further," Charter Equity Research analyst Ed Snyder told Reuters.

Motorola, the world's number two manufacturer of wireless handsets after Nokia, has been criticized for a lack of hit phones since its flagship Razr phone.

The firm has been trying to drive growth through cost cutting measures. It announced in May plans to axe another 4,000 jobs across its workforce, its second round of job cuts this year.

However, analysts are saying these measures may not be enough.

"What we need is products. Cost cutting is not sufficient. If there are no clear signs of a turnaround by year end, we could see additional changes in management," Oppenheimer analyst Lawrence Harris said, according to the Reuters report.

Motorola has so far refused to comment on the resignation rumours.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code