Can Motorola Keep Ringing Up Big Gains?
HOLD THE PHONE, Motorola fans. The once-beleaguered maker of mobile telephones last week reported a rare "blow-out" quarter, but it might be wise to wait to toast the turnaround for at least a few more quarters.
"In all my years of covering this company, I've never seen all of the segments line up and report like this. Which means it probably won't last," says telecommunications analyst Ed Snyder of Charter Equity Research in San Francisco.
The long-time observer of the Schaumburg, Ill., electronics conglomerate wonders whether Motorola can maintain its newfound momentum. But he has no intention of raining on the parade of new chief executive Ed Zander, who was happy to report the big numbers after barely more than one full quarter at the helm.
Zander, the former No. 2 at Sun Microsystems, replaced Christopher Galvin, the grandson of the company's founder, in September. Motorola reported profit of $609 million, or 25 cents a share, more than triple the level of the same period a year earlier, on sales of $8.6 billion -- nearly $2 billion more than analysts had expected. Motorola shares rose 26% from the close of trading Tuesday, when earnings were announced, to a 52-week high of 20.89 on Friday.
The stock certainly popped like a weasel, but Snyder isn't telling his clients to jump into the frothy shares right now. Instead, he is advising folks to watch how Nokia, the No. 1 cellphone maker, responds and to wait for potential dips. "There should be other entry points later this quarter," Snyder says.
Motorola's stellar results were driven by lights-out handset sales -- the company shipped 25.3 million, 51% more than in the corresponding 2003 quarter -- and strong semiconductor revenues. Snyder offered three reasons for the huge quarter:
o Product shipments that Motorola failed to deliver in the fourth quarter were pushed into the first.
o Nokia was "weak everywhere."
o Demand for handsets worldwide was very strong.
Snyder's optimism is tempered by his belief that the first two factors -- especially Nokia's uncharacteristically poor performance -- won't linger for more than a quarter or two. In the first quarter, Motorola won over a lot of mobile phone users, especially in Europe and Asia, taking a huge bite out of Nokia's worldwide market-share lead.
The Finnish mobile-phone maker saw its global share drop to 34.7%, versus 37.4% in the last three months of 2003, according to Snyder's analysis of data provided by the handset makers. At the same time, Motorola's share jumped to 19.6% from 16.4%.
Nokia suffered from a rare misreading of consumers' shifting tastes, mostly in mid-priced phones in Europe, he says. Nokia has long focused on "candy-bar" phones as opposed to Motorola's development of sleek "clam-shell" designs or "flip" phones. And for various reasons, professionals and hipsters from London to Milan have been coveting the flip models made by Motorola, he says.
But don't for a minute expect Nokia to sit on its hands. While the phone giant may not be capable of whipping up competitive designs overnight, it can reclaim customers and coveted market share by slashing prices.
"Nokia all but said that it would take back market share, which is very aggressive [guidance] for them," Snyder says. "Nokia's price cuts will squeeze everybody this quarter."
Snyder fears that Motorola might be too content with its recent success. "I don't think that Motorola is taking [Nokia's pricing] threat seriously, based on their comments on the conference call. They are on top of the world right now," he says.
Enjoying the win is swell, but the game clock for the second quarter is already ticking. History shows that gains can slip away quickly: In the third quarter of 2001, Motorola snuck up and grabbed substantial share from Nokia only to see Nokia reclaim much of it in the following quarter, Snyder recalls. The analyst contends that old habits are hard to break, even with new brass occupying the executive suite.
The good news for both companies is that handset sales for the rest of the year are expected to remain strong, with Motorola hoping to match its first-quarter sales performance in the second quarter. But it depends largely on how "deep" and "fast" Nokia starts bringing prices down, Snyder says.
The other piece of the earnings puzzle was the semiconductor business, which is booming. "And I don't see that letting up anytime soon," Snyder says. Motorola couldn't advise the Street on semis for this quarter because of a pending spin-off of the unit and the consequent "quiet period" this imposes on the company. But the analyst is betting that this quarter's performance will surpass that of the first.
If Nokia does indeed launch a price war in the phone market, inventory probably would evaporate quickly, which is good for companies in the supply chain, such as Qualcomm. The San Diego-based firm earns royalties on designs for semiconductors used in Code Division Multiple Access (CDMA) phones, which are made by Motorola.
Qualcomm also announced its earnings last week, smashing analysts' estimates with a fourfold increase in quarterly earnings. The stock was trading Friday at 66.82, up 3.3% from Monday's close.
Analyze This
We had a hunch that Siebel Systems was out kicking the tires on some potential software acquisitions (Plugged In, March 1).
We thought that the customer-relations management software outfit had its sights on a maker of business analytics software, which means we were in the ballpark. Last week, Siebel announced that it had forged a partnership with privately held Teradata, a maker of data-warehouse software that is often necessary to use with business analytics -- software that allows managers in specific industries to make real-time decisions based on information across different computer networks in their companies. The partnership sets the table for Siebel to acquire such software concerns, which it needs to do to offset maturation of its core CRM market.
What's more, Siebel did indeed get out its checkbook last week and buy a business software concern. The San Mateo company announced that it had purchased Eontec, a Dublin-based provider of software for retail banking transactions. Siebel says the merger will let it give retail banks the ability to increase branch profitability. The company also says that banks are expected to spend as much as $1.4 billion on new technology for their branches by 2006.
Siebel is expected to fork out as much at $130 million for the deal, depending on performance of the acquired unit. Shareholders were unimpressed as the shares went mostly sideways for the week, trading Friday at 11.46.
Art Imitating Life
The job outsourcing debate is practically ubiquitous. Rarely a night goes by that Cable News Network anchor Lou Dobbs isn't flogging that story, mostly in favor of American labor. But the tube's fascination with the topic doesn't stop there.
On last week's episode of the West Wing, President Bartlett cut an international trade deal with Congress's blessing that allowed software programmer jobs to be shipped to Bangalore. But Late Night talk show host David Letterman took the cake in a monologue last week. Said Letterman: "The writing for this show was outsourced to writers in India."
摩托罗拉的喜人涨势能否持久？
用摩托罗拉(Motorola)手机的人，可千万拿好了。这家备受打击的手机生产商上周发布了异常出色的季度业绩报告，但你最好还是耐心一点儿，多等上几个季度再为摩托罗拉重振雄风举杯祝贺吧。
Charter Equity Research驻旧金山的电讯产业分析师爱德华?辛恩德(Ed Snyder)说，在他跟踪分析摩托罗拉的这些年里，从未看到过摩托罗拉旗下所有业务全线上扬的情形，该公司的业绩从没像这次这么好过。他因此得出结论，这种势头不会长久。
作为长期关注这家电子产品大型企业的观察家，辛恩德虽然怀疑摩托罗拉刚刚崭露头角的喜人涨势难以持久，但也不愿给摩托罗拉新任掌门人爱德华?桑德尔(Ed Zander)泼太多冷水。桑德尔上任差不多刚满一个季度，上周他喜气洋洋地宣布了这份骄人业绩。
桑德尔此前是Sun电子计算机公司(Sun Microsystems, 又名：升阳微电脑)的二号人物，在克里斯托弗?高尔文(Christopher Galvin)去年9月份隐退后执掌大权。
摩托罗拉宣布，刚刚结束的第一财政季度实现净利润6.09亿美元，合每股收益25美分，是上年同期的两倍多。销售增至86亿美元，比分析师的预期高出了近20亿美元。从上周二盘后发布业绩至上周五收于20.89美元，该股累计升幅达到26%。
但辛恩德并没有建议他的客户及时追买，而是建议他们关注业内老大诺基亚(Nokia)的反应，并做好摩托罗拉股价下滑的准备。他说，本季度晚些时候应该会再次出现买进机会。
手机销售的强劲势头是推动摩托罗拉实现出色业绩的主要原因，第一季度摩托罗拉手机出货量达到2,530万部，较上年同期激增51%。此外，半导体业务的表现也是功不可没。辛恩德总结了三大原因：
一、上财年第四季度未能履行的出货量推延到了第一季度；
二、诺基亚各方面表现欠佳；
三、全球手机需求异常强劲。
辛恩德的谨慎主要因为他认为，前两条因素至多只能持续一两个季度，尤其是诺基亚异乎寻常的疲软表现。第一财政季度，摩托罗拉赢得了大量手机用户的欢迎，尤其是在欧洲和亚洲市场，对诺基亚领先全球的市场地位造成了很大打击。 辛恩德根据手机生产商们提供的数据进行计算，发现第一季度诺基亚全球市场占有率从上个季度的37.4%降至34.7%，与此同时摩托罗拉的占有率从16.4%升至19.6%。
他说，对用户偏好的误解，尤其是对欧洲市场中等价位手机用户偏好的误解是诺基亚的重大失误，这在以前极少出现。长期以来，诺基亚的主打机型都是方方正正的，与摩托罗拉圆头圆脑的贝壳形状或是翻盖设计手机明显不同。他说，而出于各种原因，在过去一段时间里，从伦敦到米兰的中等价位手机用户一直对摩托罗拉的翻盖设计情有独衷。 但诺基亚决不会束手待毙。虽然不能在一夜之间推出机具竞争力的新款手机，但可以通过降价来赢回客户和市场占有率。
辛恩德说，诺基亚就差明明白白表示要夺回市场占有率了，这是诺基亚的一项积极目标。眼下这个季度，诺基亚一旦降价，所有厂商都难逃其累。
他担心摩托罗拉会因为刚刚取得的成绩而骄傲自满。他说，从摩托罗拉讨论业绩的电话会议上看，他们并没有认真对待诺基亚可能降价带来的挑战。他们现在眼高于顶。
享受成功当然不错，但下一场征战已然开始。是非成败转头空，这在历史上不乏前车之鉴。辛恩德回顾说，就在不远的2001年第三财政季度，摩托罗拉从诺基亚手中夺得了大量市场占有率，但紧接著下个季度就只能眼睁睁看著诺基亚反败为胜。他认为，习惯一旦养成就很难改掉，虽然换了掌门人，摩托罗拉恐怕仍然旧习难改。
今年余下时间里手机销售势头有望保持强劲，这对摩托罗拉和诺基亚来说都是好消息。摩托罗拉预计第二财政季度销售额与第一季度持平。但辛恩德认为，这要取决于诺基亚降价的幅度有多大，速度有多快。
另一个影响摩托罗拉业绩的关键因素是半导体业务。第一季度半导体业务实现增长，辛恩德认为短期内增长势头将会持续。由于计划剥离半导体业务，摩托罗拉没有发布半导体业务这个季度的业绩预期。但辛恩德预计第二季度的表现会超过第一季度。 如果诺基亚发起价格战，手机存货就会很快告竭。这对高通(Qualcomm)等手机设备供应商来说是个好机会。高通拥有码分多址(Code Division Multiple Access, CDMA)技术，摩托罗拉等手机生产商要向高通缴纳使用费才能生产CDMA手机晶片。
