Black Wednesday for Moto
23-01-2008
by Ciara O'Brien

It was a bad day for Motorola on Wednesday as the handset maker predicted an unexpected loss following a slump of 84 percent in quarterly profits.

It was a gloomy outlook for the mobile phone manufacturer as income for the three-month period slipped to USD100 million, a significant drop from USD623 million a year earlier, and sales fell 18 percent to USD9.65 billion. Meanwhile, sales for the full year 2007 fell by a third to USD19 billion.

Sales within Motorola's troubled mobile-phone unit slumped 38 percent to USD4.8 billion, giving it a loss of USD388 million. The firm also shipped fewer phones during the quarter, selling 40.9 million units compared to last year's 65.7 million.

Rivals Apple and Samsung have been eating into its sales, and the company is predicting a major drop in phone shipments in the coming quarter. It also warned the market to expect a loss in the first quarter of between USD0.05 and USD0.07 a share.

This spooked analysts further, who had been expecting earnings per share of USD.10 on revenue of USD9.60 billion.

"We are focused on aggressively rationalising the company's cost structure and working to get Mobile Devices back on track," said Greg Brown, chief executive officer of Motorola. "The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done. Our primary focus is on improving profitability and enhancing our product portfolio in this business."

However, sales in both the Home and Networks Mobility and Enterprise Mobility Solutions divisions were both up on the same quarter in 2006, although operating earnings in the Home and Networks Mobility segment fell to USD192 million from USD223 million a year earlier.