Earnings alert: Motorola profit shrinks
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Plus: Apple posts good Q1, despite slow iPod sales...Microsoft expected to post healthy profits...Seagate turns in mixed report...IBM targets well above expectations.
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Motorola&#39;s mobile-phone business continued to lose its signal in the fourth quarter, dragging the company&#39;s revenue and profit down.The Schaumburg, Illinois, company has had trouble coming up with a phone to match the success of its original Razr, which is now several years old and does little for the company&#39;s bottom line. Motorola&#39;s Mobile Devices unit had sales of $4.8 billion in the fourth quarter, down from $7.8 billion a year earlier, and the division lost $388 million compared with profit of $341 million in last year&#39;s fourth quarter.Stronger results with enterprise and home-network products eased Motorola&#39;s pain, but the company still reported a steep fall in profit for the quarter and a loss for the full year 2007. In the fourth quarter, Motorola had net income of $100 million and earnings per share of $0.04, down from $529 million or $0.25 a year earlier. The company lost $49 million or $0.02 per share for the year. Companywide, revenue in the quarter fell to $9.6 billion from $11.8 billion a year earlier.The outlook for the current quarter is no better. Along with Wednesday&#39;s earnings report, Motorola forecast a loss of between $0.05 per share and $0.07 per share, excluding charges associated with its cost-reduction initiatives and other items.&quot;The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done,&quot; CEO Greg Brown said in a prepared statement. The company&#39;s &quot;primary focus&quot; is to improve profits and enhance its mobile products, he added. Motorola is also focused on reducing costs and took several steps to make the Mobile Devices business more efficient, he said.Once locked in a struggle with Nokia for cell-phone sales leadership,&#160;Motorola had fallen to third place&#160;behind Samsung by last year&#39;s third quarter. Last May, when it introduced the Razr&#39;s successor, called the Razr2, the company said it hoped the new device would cut losses. But tough times have continued in the face of Apple&#39;s iPhone and other high-profile competitors, and in late November,&#160;CEO Ed Zander was replaced by Brown.Fourth-quarter sales were up in both the Home and Networks Mobility group, which makes set-top boxes and wireless infrastructure, and in Enterprise Mobility, which benefitted from Motorola&#39;s acquisition of Symbol Technologies early last year. The home business saw sales rise 11 percent to $2.7 billion, though its profit fell to $192 million. Profit in the home business soared to $451 million from $323 million in the fourth quarter of 2006, while sales were up 35 percent to $2.1 billion.In midday trading Wednesday, Motorola&#39;s shares on the New York Stock Exchange were down $2.32 to $10.00 amid a generally weak day on Wall Street.
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Motorola Inc.  aims to cut the  cost of making its cheapest mobile phones by about $2 to $5 per  handset to improve profits, Chief Executive Ed Zander said on  Thursday.
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(InfoWorld) - Amid increasing competition in a fickle cell phone market, Motorola expects to report a loss for its mobile devices business in 2007 and now estimates that second quarter sales will be lower than expected. The number two handset maker said on Wednesday that second quarter sales for the company would be $8.6 billion to $8.7 billion, instead of $9.4 billion as previously expected. That drop in expected sales is the result of lower handset sales, particularly in Asia and Europe, Motorola said. In the second quarter, Motorola expects to report sales of 35 million to 36 million handsets. That will lead to a larger operating loss for the mobile device business in the second quarter compared to the first quarter, it said. During the first quarter, Motorola sold 45.5 million phones. At the time, the company said it foresaw a gradual recovery of its mobile phone business throughout the rest of the year with expectations of a profitable year. Motorola now expects a second quarter generally accepted accounting principles loss per share in the range of $0.02 to $0.04. The company will announce its earnings for the second quarter 2007 on July 19 and will offer further details then, it said. Motorola also announced that it named a new president for the mobile division: Stu Reed, formerly executive vice president of integrated supply chain for Motorola. Reed's predecessor, Ron Garriques, left the company in February to head up Dell's global consumer division. Prior to its first quarter earnings report, Motorola also had to warn that sales would be lower than expected. It made some executive changes then, including the appointment of a new president. Earlier in the year, Motorola had implemented a new plan to help it improve profitability, but that plan wasn't working out, the company said during the first quarter earnings warning. Most of the large handset makers are struggling to keep profits up as sales in established markets like Europe stagnate as most people there already have phones. The companies are increasingly branching out into emerging markets, such as India and China, but they must sell their phones at lower prices to win customers there. That's squeezing profit margins."The only real growth is at the low end, which means there's nice unit growth, but the dollar growth is not there," said Will Strauss, an analyst with Forward Concepts. "This year is a soft year for the cell phone market, in spite of Apple," he said. Apple's hugely hyped iPhone is expected to sell around 10 million units through next year, which may sound like a lot. But this number is dwarfed by the approximately 150 million units that companies like Nokia sell in a year, Strauss said. The iPhone isn't affecting the sales of the biggest cell phone companies, but it may help companies like Motorola realize what they need to do to improve their prospects, he said. The only way that the mobile phone companies can grow profits in saturated markets is to "convince everybody that they need a new cell phone with new bells and whistles," Strauss said. "The iPhone is raising awareness of what the future cell phones are going to look like." In addition, Motorola is notorious for producing hit phones, like the Razr, that sell well but then failing to follow up with additional models that continue the momentum. "They rode too long on the Razr," Strauss said. But the handset maker could get a boost later in the year when it starts selling the Razr 2, which Avi Greengart, an analyst at Current Analysis, said is a big improvement on the first version. Motorola is likely to learn from its mistakes the first time around too. "In the past, they really let the original Razr run away with volume as opposed to maintaining it as a premium fashion phone," he said. "I think this time they're going to resist the rapid price drop." This story was updated on July 11, 2007. Â
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Motorola Inc. , the world's No. 2 maker of cell phones, on Tuesday said its quarterly profit rose sharply, helped by improving sales of a host of new handset models.
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In an attempt to turn around weak quarterly results, Motorola's CEO says the company will spend less to manufacture its low-end phones.
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Motorola Inc  said on Wednesday it will post an operating loss in the current quarter as its cell phone business is taking longer than expected to turn around, dashing Wall Street hopes for a profit and sending its shares down 15 percent.
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Motorola Inc. , the No. 3 worldwide maker of cell phones, on Tuesday said quarterly earnings rose, helped by robust holiday sales.
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Slashed earnings estimate pulls down shares.
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Motorola Inc. MOT.N, the world's No.  2 maker of cell phones, on Tuesday said its quarterly profit  more than tripled, but growth in handset volumes disappointed  Wall Street and its shares fell 4.5 percent.
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Plus: Nokia earnings soar, market share solid...Qualcomm results show strong demand...eBay warns of weaker 2008 results...Motorola profit shrinks, phone forecast dims.
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Plus: Alcatel outlook weak...Cisco profit climbs...Time Warner lowers earnings target...Electronic Arts lowers outlook.
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Amid increasing competition in a fickle cell phone market, Motorola Inc. expects to report a loss for its mobile devices business in 2007 and now estimates that second quarter sales will be lower than expected.
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Motorola Inc. MOT.N, the world's No.  2 maker of cell phones, on Tuesday said its quarterly profit  rose sharply, helped by improving sales of a host of new  handset models.
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Blog: Motorola reported more losses for the second quarter of 2007, but management hopes that a recovery is still on the horizon.
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End of Zandr line cheers gloomy investors Motorola is forecasting another dreary quarter, citing poor sales in Asia and Europe for its lower-than-expected outlook.â¦
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Motorola Inc.  said it expects to cut an  additional 4,000 jobs as it continues to lower costs.