AFTER HOURS: Motorola Cuts Forecast; Shares Fall Nearly 5%

SAN FRANCISCO (Dow Jones) -- Motorola shares dropped nearly 5% Wednesday evening after the mobile-phone maker cut its financial forecast and outlined a shakeup in its executive lineup as it aims to improve the performance in its wireless handset business.

The Nasdaq-100 After Hours Indicator, which tracks evening trading of the index's leading technology stocks, fell 0.1 point to end at 1,806.23.

Motorola shares closed down 4.9% at $17.83. Trading of its shares were halted before the company warned that it expects a first-quarter loss between 7 cents to 9 cents a share because of lower-than-expected sales and operating earnings.

It forecast first-quarter sales of $9.2 billion to $9.3 billion, below its previous forecast of $10.4 billion to $10.6 billion. Motorola also said it sees fiscal 2007 sales "substantially" below its previous forecast.

"Performance in our mobile devices business continues to be unacceptable, and we are committed to restoring its profitability," said Motorola's Chief Executive Ed Zander in a statement.

The company also named Thomas Meredith as chief financial officer, replacing David Devonshire, who will retire on April 1. Greg Brown was tapped to serve as Motorola's president and chief operating officer, where he will oversee its slumping handset business.

Motorola has been the subject of market speculation that it would move to purchase wireless handheld devices maker Palm.

Palm's late-traded shares finished at $19.19, a decline of 1.3%.

Shares of Palm's rival, Research in Motion, pared losses to end down 35 cents at $134.55.

(END) Dow Jones Newswires"

Posted to the site on 22nd March 2007