Motorola Post Profit, Handset Losses Cut
By Joseph Palenchar On May 3 2010 - 4:01am
SCHAUMBURG, ILL. — Motorola
posted its fourth consecutive quarterly
net and operating profit in its fiscal first
quarter as losses in its wireless-handset
division were significantly reduced.
The division’s own operating losses for
the sixth consecutive quarter, but company-
wide sales continued to shrink, including
handset division sales.
In its fiscal first quarter ending April
3, Motorola posted $68 million in net
earnings, compared with a year-ago loss
of $228 million. First-quarter sales of
$5.04 billion were down 6 percent from
the year-ago quarter.
Though handset sales were down
9 percent to $1.64 billion in the quarter,
they fell at a slower rate than in recent
quarters. In the fiscal fourth quarter,
for example, handset sales were down
22 percent, and for all of 2009, they were
down 41 percent.
Operating losses in the handset division
shrank 65 percent to $192 million,
compared with a year-ago operating
loss of $545 million. Operating earnings
in each of Motorola’s other groups —
home, enterprise mobility and networks
— grew to a combined $273 million to
offset the handset division’s losses.
The company reiterated its forecast
that the handset division will post an
operating profit in the fourth quarter of
2010, driven by a greater reliance on higher
margin Android smartphones.
Because of Motorola’s growing smartphone
shipments, the company’s average
selling price grew to $192 in the quarter
from $169, co-CEO Sanjay Jha said.
During the first quarter, Motorola
shipped 8.5 million handsets, down from
14.7 million in the year-ago period. Firstquarter
shipments included 2.3 million
smartphones, up sequentially from the
fourth quarter’s 2 million smartphones.
About 65 percent of the company’s first quarter
smartphone shipments were to
the U.S., Jha said in an investors’ conference