Motorola Q1 Sales Fall, Cuts Losses - Twice

Motorola Q1 Sales Fall, Cuts Losses

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Motorola's revenues shrank in the first quarter on a year-over-year and sequential basis, but the company lost markedly less money on a sequential basis, the company said.

The operating-loss improvements are the result of cost-reduction strategies that will reduce the company's overall expenses by $1.7 billion for the full fiscal year.

Motorola's first-quarter revenues dropped 28 percent year over year to $5.37 billion, largely due to a 45 percent decline in wireless handset sales to $1.8 billion. Company-wide first-quarter operating losses grew 67 percent to $449 million compared to the year-ago period. On a sequential basis, however, the company's operating losses shrank 73 percent from the fourth quarter's $1.68 billion despite a sequential sales decline of 25 percent.

Unit sales of handsets, which accounted for 33.5 percent of company revenues in the first quarter, fell to 14.7 million from a year-ago 27.4 million and from the fourth quarter's 19.2 million. Motorola estimated its worldwide handset unit share at 6 percent in the first quarter, down from the year-ago 9.4 percent and down from the fourth quarter's 6.5 percent. Motorola's second-quarter handset sales will be “comparable to slightly down” from the first quarter, said co-CEO Sanjay Jha. Sequentially, handset dollar volume fell from $2.35 billion to the first-quarter's $1.8 billion.

The handset segment's operating losses were down sequentially to $381 million from the fourth quarter's $471 million, “primarily due to reductions of 40 percent year-over-year and 25 percent sequentially in operating expenses,” said Jha.

Revenues in the company's home and networks mobility segment fell in the first quarter by 16 percent to $1.99 billion, and revenues in the enterprise mobility segment fell 11 percent to $1.6 billion, but both segments posted operating earnings of $115 million and $156 million, respectively, even though those earnings were down 25 percent and 38 percent, respectively.

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