Motorola Rises on Analyst Upgrade

Motorola (NYSE: MOT) was up 53 U.S. cents to $12.03 in morning trading Monday, following reports that Morgan Stanley Dean Witter had upgraded the stock to strong buy from outperform.

The firm reportedly cited the low price of the stock, which has taken a pounding in recent weeks because of a weakening economy and drop in semiconductor demand. A year ago, Motorola shares traded above $52.

Motorola plans to report quarterly results after the close of trading Tuesday. Analysts expect the Schaumburg, Illinois-based semiconductor and cell-phone maker to lose 7 cents per share on sales of $8.08 billion.

Motorola already lowered its outlook for the first quarter ended in March, saying weakness in orders across all its product lines will result in an operating loss. The company blamed the “sharp economic slowdown” in the U.S. and related “inventory corrections” in technology markets.

To deal with the slowdown, the company has been cutting jobs. Since December, Motorola has announced plans to eliminate approximately 22,000 of its 147,000 workers.

Motorola initially predicted first-quarter sales of $8.8 billion and earnings of 12 cents per share. In the year-earlier quarter, the company earned 20 cents per share on sales of $8.8 billion.

On Friday, Motorola denied a report that it might face a liquidity problem, saying it has more than $4.5 billion in cash and cash equivalents.

“Motorola today is financially sound,” said president and chief operating officer Bob Growney.

The company also said that it expects accounts receivable and inventory levels to decline this year, and is looking for a “very significant increase” in proceeds from investment and business sales this year when compared to last year.

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