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Motorola Mobile Phone Segment Sales Soar 45%

4/19/2006 08:48:00 AM Eastern

Schaumburg, Ill. — Shipments of mobile phone handsets increased 61 percent in the first quarter at Motorola, reaching a record 46.1 million units, and helping the company push up its mobile devices segment sales by 45 percent in the three months, to $6.4 billion, from $4.4 billion in the year-ago period.

Operating earnings in the first quarter, ended April 1, for the mobile devices segment — by far the company’s largest — increased to $702 million, from $440 million in the same three months the previous year.

Motorola estimates its global handset market share climbed 4.8 percentage points in the first quarter, reaching a 21 percent share overall, compared with the same period in 2005, and up from 19 percent in the fourth quarter of last year. It also said it has increased brand strength and market-share leadership in the Americas.

In its connected homes solutions segment, Motorola sales climbed 7 percent in the first quarter, reaching $710 million, up from a year-earlier $662 million.

Operating earnings for the segment, however, dipped to $15 million in the first three months, down from a year-on-year $19 million. Excluding restructuring charges of $43 million that are included in the 2006 first quarter results, operating earnings increased 205 percent, compared with the same quarter last year.

Motorola said it continued to see strength in shipments of video, voice and data infrastructure, and that it had shippeda record number of digital entertainment devices — more than 2 million. This was an increase of about 48 percent over the last quarter in 2005.

Motorola’s mobile phone business helped boost consolidated first quarter sales 23 percent, hitting $10 billion, up from $8.2 billion in the first three months last year.

However, the company recorded a 1 percent decrease in first quarter consolidated net earnings, edging downward to $686 million, from $692 million in the same period the previous year. Strength in its handset unit failed to offset weakness in its networks segment, which reported a 14 percent decrease in sales for the first quarter, due mainly to slower sales in Asia, said the company.

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