Shares in Motorola fell more than 4%

It said the outbreak of the deadly Sars virus was partly to blame for a drop in demand, and an excess of stock in Asia added to the problems.

An earthquake in May also damaged the company's semiconductor plant at Sendai in Japan, temporarily disrupting manufacturing.

Motorola is now predicting sales of up to $6.2bn (�3.7bn) for the second quarter of the financial year.

It had been talking about a figure of $6.4bn-6.6bn.

Shares in Motorola fell more than 4% when the markets opened in New York.

The company said that sales in North America, Latin America and Europe were all meeting expectations.

And it expected to break even during the current three month period to the end of June.