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Heavy competition hits Motorola's bottom line
Wednesday, April 18 2007
by Ralph Averbuch


Weak handset sales hit Motorola's results in the first
quarter, as the mobile manufacturer revealed a loss for the
three-month period. 

The world's second biggest mobile phone manufacturer just
managed to hit analysts' expectations with a loss of USD181
million, or USD0.08 a share, as increased competition in the
market hit home. Excluding one-time items such as
acquisitions costs, this translated into USD0.02 a share,
just meeting analysts' expectations. 





In March, Motorola chiefs revised their forecasts and
predicted the quarterly loss, forecasting sales in the range
of USD9.2 billion to USD9.3 billion, down from previous
expectations of USD10.4 billion to USD10.6 billion. 





Motorola's mobile devices division saw a year-on-year slump
of 15 percent, achieving revenue of USD5.4 billion, with the
unit posting an operating loss of USD231 million. 





The US-based  phone maker shipped just 45.4 million
handsets during the quarter, a significant decrease from 65.7
million in the fourth quarter.





Despite the poor quarterly performance the company remained
confident that it would post a profit for the full year, and
predicted a profit in the second quarter of USD0.02 to
USD0.03 a share, excluding one-off items. This clashes with
analysts' expectations of USD0.08 per share for the coming
quarter. However, the company is counting on a stronger
second half. 





Motorola is also due to continue its cost-cutting measures,
which have already hit its Irish workforce in Cork. In March,
the company announced it was slashing 330 positions from its
Munster workforce as part of a global plan.