Motorola posts 3Q sales jump, first since 2006

Oct 28, 2010 By PETER SVENSSON , AP Technology Writer
The packaging for a Droid, made by Motorola, is seen in a store in Portland, Maine, on Wednesday, Oct. 27, 2010. Motorola said Thursday, Oct. 28, sales rose in the latest quarter compared to a year ago, the first such rise since 2006, when its Razr phone was still popular. (AP Photo/Pat Wellenbach)

(AP) -- Motorola Inc. on Thursday posted its first year-over-year quarterly sales rise since 2006, when its Razr phone was still cutting-edge technology.

The company's phone division reported an for the first time in three years. It hadn't expected that to happen until next quarter. The division is pulling out of a deep dive by betting on smart phones like the Droid X.

Revenue rose 6 percent to $5.8 billion in the July to September period.

The Schaumburg, Ill., company reported of $109 million, or 5 cents per share. That's up from $12 million, or 1 cent per share, a year ago. Excluding items, would have earned 16 cents per share. Analysts expected 11 cents per share.

However, nearly all the profits came from the soon-to-be sold network equipment division, which supplies cell phone companies. Without it, net income would have been only $7 million, or less than 1 cent per share.

Motorola shares rose 52 cents, or 6.4 percent, to $8.61 in morning trading.

In July, Motorola agreed to sell the network equipment division for $1.2 billion to Nokia Siemens Networks, a Finnish-German joint venture. That deal is expected to close late this year.

Early next year, the iconic U.S. electronics brand will split into two companies. The cell phone and cable box business will be called Motorola Mobility. Police radios, bar-code scanners and other products for corporate and government customers will be under Motorola Solutions.

The split has been driven by a desire to present two simple stories to investors rather than one complex one. It was announced in 2008, but was soon delayed with phone sales collapsing. The successful turnaround now sets the division up for a life of its own.

The phone division shipped 9.1 million units in the most recent quarter, of which 3.8 million were smart phones. Both figures were an increase from the second quarter, halting a multiyear sales slide.

However, Motorola finds itself in a very different place compared to when the slide started. In 2006, it was the second-largest phone maker in the world. Now, it's not even in the top five. It's the third-largest phone maker in North America, after Apple Inc. and Research In Motion Ltd., the maker of the BlackBerry.

Motorola said it expects fourth-quarter earnings of 14 cents to 16 cents per share, excluding the network division. Analysts were on average expecting 15 cents per share, including the network division. Considering the networks division added 4 cents per share in the third quarter, Motorola's forecast is higher than Wall Street's.

Looking further ahead, analysts are concerned about recent press reports, unconfirmed by the companies, that Verizon Wireless will get to sell Apple's iPhone in the first quarter. Verizon has been a key supporter of Google Inc.'s Android software, on which Motorola's new are based, and has positioned the "Droid" line of phones from Motorola and HTC Corp. as its alternatives to the iPhone.

On a conference call after the earnings release, Sanjay Jha, the head of the phone business, sought to reassure analysts.

"We expect to continue a very meaningful relationship with Verizon. We think the Droid franchise is economically very valuable for Verizon and they will continue to invest," Jha said.

Jha wouldn't say how much of its smart phone sales go to Verizon.

Motorola executives also talked about producing a tablet computer. That would set up another field of competition with Apple, which launched its iPad this year.

Motorola's tablet would be different in that it would be able to get a cable-TV feed from the company's set-top boxes, making it a small-screen complement to the TV set, executives said. Motorola's cable-box unit will go with the phone unit when the company splits up.

Explore further: Apple closes acquisition of Beats music

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Motorola posts profit, strong sales; stock jumps

Apr 29, 2010

(AP) -- Motorola Inc. posted an unexpected profit in the first quarter, as sales of its new phones outdid its own forecasts. It also gave an outlook that was brighter than Wall Street was predicting, and ...

Motorola 2Q earnings climb, revenue stabilizes

Jul 29, 2010

(AP) -- Motorola Inc. on Thursday reported a sharply higher profit for the second quarter and stabilized its long revenue decline as it strategy of focusing on smart phones like the Droid bore fruit.

Motorola posts unexpected 2Q profit

Jul 30, 2009

(AP) -- Helped by deep cost cuts, Motorola Inc. on Thursday posted an unexpected profit for the second quarter after several quarters of losses, and said it expected things to keep improving this year.

Motorola loss widens; analysts see worrisome signs

Apr 30, 2009

(AP) -- Motorola Inc. defeated low expectations Thursday, posting a smaller first-quarter loss than Wall Street had expected and regaining its position as the world's fourth-largest maker of cell phones.

Nokia Siemens to buy Motorola wireless gear unit

Jul 19, 2010

(AP) -- Motorola Inc. said Monday that it is selling most of its wireless network division to Nokia Siemens Networks, a Finnish-German joint venture, for $1.2 billion as part of a planned breakup of the company.

Recommended for you

Apple closes acquisition of Beats music

1 hour ago

Apple said Friday it closed its $3 billion deal for Beats, the high-end audio equipment and streaming music service, a tie-up that could allow the iPhone maker to reach new audiences.

Scientific Games strikes $3.3B deal to buy Bally

3 hours ago

Scientific Games plans to pay about $3.3 billion to buy Bally Technologies in a deal that would combine makers of gambling equipment ranging from slot machines to instant-win lottery games.

Tesla loss widens as it ramps up expansion plan

8 hours ago

US electric automaker Tesla Motors reported Thursday a widening loss in the past quarter amid record revenues as it ramped up plans for a giant battery plant for future vehicles.

Android grabs 85% of smartphone market

22 hours ago

Smartphones powered by the Android operating system captured 85 percent of the worldwide market in the second quarter, threatening to marginalize rival platforms, a new survey shows.

Chinese man brings gay conversion therapy lawsuit

Jul 31, 2014

(AP)—A gay Chinese man said Thursday he was suing a psychological clinic for carrying out electric shocks intended to turn him straight, as well as the search engine giant Baidu for advertising the center.

User comments : 0