Monday, 3 November 2008

Motorola Suffers a Hard Time with Revenue Generation

Motorola is postponing the spin-off of its mobile division initially planned for third quarter of 2009 after reporting less than encouraging financials today.

The company said that it would cut down the number of wireless platforms it offers on its handsets, leaving only Google's Android and Microsoft's Windows Mobile for smartphones and the P2K system for conventional mobiles.

"While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices," said Sanjay Jha, Motorola-s co-chief executive officer and CEO of Mobile Devices, in a statement.

Motorola had revenue of USD 7.4bn in the last three months, with USD 3.1bn of that coming from handset sales of 25.4 million. However, the handset division lost USD 840m during the quarter, while the company overall only lost USD 397m - 18 cents a share. As a result, Motorola is also planning to cut some 3,000 jobs in the coming months.

Going forward Motorola expects the challenges to continue into early 2009, expecting earnings in the range of 2 cents to 4 cents per share in the fourth quarter, with full year earnings per share ranging from 5 cents to 7 cents.