Schaumburg, Ill. – Motorola posted its fourth
consecutive quarterly net and operating profit in its fiscal first quarter on
significantly lower losses in its wireless-handset division.
The
division reduced its own operating losses for the sixth consecutive quarter.
However,
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. First-quarter 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 call.
The
company raised the low end of its guidance for full-year smartphone shipments
from 11-14 million to 12-14 million despite growing competition. Eight of 20
planned Motorola smartphones to be launched in 2010 have already been announced
worldwide, he said.
The
company has previously said its overall handset unit shipments will decline in
2010 as it continues to pare its portfolio of feature phones, whose sales and
margins are being pressured growing smartphone sales, falling smartphone prices,
and growing worldwide sales of basic phones.
Handsets
accounted for 32.5 percent of company sales in the quarter and 32 percent in
all of 2009.
