Earnings Reports for Jan. 10

— -- Motorola’s Meets Diminished Expectations

Struggling cell-phone maker Motorola Inc. reported a 41 percent drop in quarterly profits despite growing sales, and pledged more cost-cutting measures in 2001 to revive earnings.

Excluding special items, earnings for the last three months of2000 were $335 million, or 15 cents a share, down from $564million, or 25 cents a share, a year earlier. That was in line withthe estimate of a consensus of securities analysts surveyed byFirst Call/Thomson Financial.

Today’s report confirmed the downward trend outlined by the company in early December whenits second warning in two months sent the stock tumbling to atwo-year low.

Motorola’s stock has been in a tailspin as the Schaumburg,Ill.-based company — the world's No. 1 cell-phone manufacturer asrecently as 1999 — slipped further behind Finland’s Nokia despiterapid growth in the world market.

Sales for the quarter climbed 11 percent to $10.06 billion from$9.09 billion.

But the company said cell-phone orders fell 20 percent, to $2.9billion.

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Yahoo! Meets Analysts’ Expectations

Yahoo! Inc., theleading Internet media site, reported fourth quarterearnings rose 44 percent, in line with Wall Street expectations. But the company issued earnings and revenue guidance for 2001 below current expectations.

The warning about future growth caused investors to sendshares of Yahoo lower in after-hours trading.

The company said it earned $80.2 million, or 13 cents perdiluted share, in the latest quarter, compared with $55.7 million,or 9 cents per share a year earlier.

Analysts who follow thecompany, on average, had expected the company to post earnings of13 cents per share, according to First Call/Thomson Financial,which tracks forecasts.

Yahoo posted a net loss of $97.8 million, or 17 cents per share,for the three months ended Dec. 31, compared with $37.8 million, or6 cents per share, in the year ago period.

“By almost any measure Yahoo continued to outperform theindustry, and took market share despite a challengingenvironment,&3148; said CEO Tim Koogle. “Yahoo hasbecome increasingly essential to consumers and businesses.”

Koogle warned, however that &3147;over the next year, we expect tosee some short-term effects from the apparent softening economy andthe continued realignment of our client base.”

After starting as a search engine in the mid-1990s, Yahoo grewinto a full-service information and shopping portal whose Web pagesare visited more than 900 million times a day.

In hopes of remaining a rare Internet success story in thisweakening economy and beyond, Santa Clara-based Yahoo has beencoming up with new ways to make money beyond charging foradvertising, which is estimated to account for 90 percent of thecompany’s revenue.

Yahoo said it has 3,700 advertisers, up from 3,450 in the thirdquarter, and is getting more ads from traditional companies,including 55 of the Fortune 100 businesses.

Dependence on online advertising has become increasingly riskyas dot-coms and other high-tech companies have slammed the brakeson their spending, and Yahoo&3146;s outlook seems to indicate worriesabout this.

Many analysts have applauded Yahoo’s recent moves to newrevenue sources, such as licensing branded corporate intranetsites.

Yahoo said this week it has lined up 18 customers for thehigh-margin sites, including McDonald’s Corp. and the Germanpharmaceutical giant Bayer AG.

Yahoo also began charging fees today to people who use thesite to auction things. The fees range from 20 cents to $1.50 — lower than the 25 cents to $2 charged by rival eBay Inc. Yahoostill will not charge commissions on successful auctions, whicheBay and Amazon.com do.

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Sales in the quarter rose 3 percent to $8.20 billion,compared to a year ago.

Kmart, battling fierce competition from other discounterslike Wal-Mart Stores Inc., said in July it would close 72stores and take a $740 million pretax charge to cover theclosures and make inventory adjustments. At that time, thecompany warned earnings for the year would fall belowexpectations.BACK TO TOP

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The Associated Press and Reuters contributed to this report.