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Motorola Cellphone Biz Posts 24% Sales Increase

Schaumburg, Ill. — Strong demand for cellphones in the United States helped ring up a record 24 percent increase in second-quarter sales for the mobile devices segment at Motorola, coming in at $4.9 billion, up from a year-ago $4 billion.

The company’s mobile devices segment, by far its largest, with 55 percent of total revenue in the three months, also posted record second-quarter unit shipments and profit. Shipments increased 41 percent to 33.9 million year-on-year, and operating earnings jumping to $498 million, from $396 million in the second three months of 2004.

Motorola’s connected home solutions segment enjoyed a 35 percent rise in sales during the second quarter, ended July 2, rising to $718 million from a year-earlier $533 million. Operating earnings in the segment rose to $47 million, from $38 million in the same quarter the previous year. The company reported shipments of 2 million digital entertainment devices, of which more than 600,000 were HD/DVR set-tops.

For the six months, the mobile devices segment recorded a 15 percent increase in sales, hitting $9.3 billion, up from a year-earlier $8.1 billion. Operating earnings in the segment for the first half came in at $938 million, compared with $802 million in the same time frame last year.

In connected home solutions, segment first-half sales climbed 40 percent, reaching $1.4 billion, up from $989 million in the first six months a year ago. Segment earning for the period topped out at $66 million, rising from the $63 million recorded year-over-year.

Motorola’s cellphone business helped push up consolidated sales for the three months by 17 percent, hitting $8.8 billion, compared with a year-ago $7.5 billion. The company moved into the black during the quarter, reporting $933 million in net profit, compared with a $203 million loss the previous year.

For the first half, consolidated sales increased to $17 billion, from $15 billion in the first six months of 2004, while first half net earnings quadrupled to $1.6 billion, compared with $406 million last year.