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Motorola Q3 Handset Segment Sales Rise 8%

Schaumburg, Ill. – Driven by strengthened demand for handsets in the Americas, Motorola’s personal communications segment third quarter sales jumped 8 percent, hitting $2.9 billion, up from $2.7 billion in the year-ago period.

At the same time, orders in the handset segment soared 44 percent in the third quarter, reaching $3.7 billion. Orders were up in North America. Handset unit shipments were 20.2 million, about a 19 percent increase, compared with the third quarter of 2002.

Operating earnings for Motorola’s personal communications segment, by far the company’s largest, decreased to $147 million, compared with $241 million year-on-year. Excluding special items, operating earnings for the segment in the three months were $165 million, compared with $225 million in the third quarter last year.

Motorola said the segment’s year-over-year decrease in operating earnings was almost entirely attributable to the company’s Asian market, where increased competition has adversely affected market share and caused pressure on average selling prices.

For the nine months, sales in the personal communications segment were flat, dipping 1 percent, to $7.7 billion, compared with $7.8 billion year on year.

Segment operating earnings reached $352 million for the three months, compared with $209 million in the same period in 2002. Excluding special items, segment operating earnings for the nine months hit $351 million, down from $503 million in the same period a year ago.

Consolidated Motorola sales for the third quarter increased 5 percent, to $6.8 billion, compared with $6.5 billion in the year-ago period. Net earnings reached $116 million in the third quarter, up from the $111 million recorded a year earlier. Excluding special items, net earnings in the three months were $132 million, vs. $133 million year-on-year.

For the nine months, consolidated sales pretty much were flat, coming in at $19 billion, compared with $19.6 billion for the same period in 2002. Net earnings for the period hit $404 million, compared with a net loss of $2.7 billion in the same period in 2002. Excluding special items, earnings were $172 million for the nine months, compared with a loss of $12 million in the same period a year earlier.

Looking ahead, Motorola expects sales to reach $7.5 billion to $7.8 billion in the fourth quarter, up from the $7.7 billion reported in the same three months the previous year.

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