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Motorola Reports Lower Net Earnings In Q4, Year

Schaumburg, Ill. — Motorola reported 48 percent lower net earnings for the fourth quarter and lower earnings for the calendar year, ended Dec. 31, 2006, due to weaker handset margins.

Net earnings for the quarter were $624 million vs. $1.202 billion for last year’s final quarter and net earnings for the year were $3.661 billion vs. $4.578 billion for the prior year.

Net sales were up for the fourth quarter and the year, Motorola reported, with fourth-quarter sales hitting $11.8 billion vs. last year’s final quarter of $10.04 billion. For 2006 net sales were $42.9 billion vs. the prior year’s $35.3 billion.

“As I said earlier this month, we are disappointed with our fourth-quarter operating earnings performance. However, the company generated strong revenue growth and met or exceeded our goals in many areas during the quarter. I am confident that we remain well positioned for continued growth and success,” said Ed Zander, chairman and CEO.

In the Mobile Devices segment sales were $7.8 billion, up 19 percent compared with the year-ago quarter. Operating earnings were $341 million, compared with operating earnings of $663 million in the year-ago quarter. Operating earnings were below the company’s internal forecast at the start of the fourth quarter due to an unfavorable geographical and product-tier mix, the company said.

For the full year 2006 compared with full year 2005, sales increased 32 percent and operating earnings increased 23 percent.

During the quarter, Motorola said Mobile Devices shipped a record 65.7 million handsets, an increase of 47 percent compared to the same period in 2005. The company continued as the clear No. 2 player in the world’s wireless handset industry, with an estimated 23.3 percent global market share and launched 25 new handsets, including six for CDMA, 10 for GSM, five for UMTS and four for iDEN.

“Looking at the full year, I am pleased with our progress. Our business remains solid, and we will continue to execute on our focused, strategic plan to create value for our shareholders. We remain committed to increasing our profitability, while delivering compelling new products and solutions to our customers in 2007,” Zander added.