Motorola Promises Full-Year Handset Operating Profit

By Joseph Palenchar -- TWICE, 7/28/2011

Schaumburg, Ill. - Motorola Mobility slightly narrowed the operating losses in its mobile devices segment in the second quarter compared with the first quarter, and chairman/CEO Sanjay Jha forecast that the segment would achieve fourth-quarter and full-year operating profits.

If Jha achieves his goal, Motorola would likely achieve a consolidated net profit during the two periods because the company's other business segment -- which mainly markets cable settop boxes and cable operator infrastructure -- posted operating profits during the second quarter and first half.

 "With a focus on profitable growth and delivering differentiated LTE smartphones and tablets, we expect to achieve profitability in mobile devices in the fourth quarter and for the full year 2011," Jha said.

For the second quarter, Motorola posted a consolidated net loss of $56 million, down sequentially from a first-quarter $81 million but contrasting sharply with net earnings of $77 million in the year-ago quarter. The first-half consolidated net loss of $137 million was about the same as the year-ago $134 million net loss.

In the mobile devices segment, second-quarter operating losses came to $85 million, down from a first-quarter $89 million operating loss but contrasting sharply with year-ago operating earnings of $87 million.

First-half mobile-device operating losses came to $174 million, up from a year-ago $105 million loss.

The mobile device losses came despite a 41 percent gain in device revenues to $2.4 billion in the second quarter compared to the year-ago quarter and a 35 percent first-half gain to $4.56 billion.

Home segment operating profits came to $62 million, up 114 percent from the year-ago period and up 135 percent in the half to $115 million. Revenues were up in the quarter by 2 percent to $907 million and in the half by 5 percent to $1.81 billion.