More bad news for Motorola

Things are not looking very good for beleaguered handset maker Motorola and its floundering financial situation. The company announced yesterday that its preliminary estimates of second quarter sales will be in the range of $8.6 billion to $8.7 billion. The firm had estimated that second-quarter sales would be flat with first-quarter 2007 sales of $9.4 billion.

The firm attributed the shortfall of sales to lower-than-expected device volume in Europe and Asia, and Motorola said that it expects its Mobile Device unit to have a larger operating loss than it did in the first quarter. In fact, Motorola now says that the company doesn't expect the Mobile Device Business to be profitable in 2007. Nevertheless, it does expect second-quarter results for its Connected Home Solutions and Networks & Enterprise business to meet company expectations. The news comes as little surprise to financial analysts such as RBC Capital [1], which earlier this month predicted that the second quarter would be a wash for the handset maker.

As we reported back in February, Motorola expects to recover [2] from this situation in the second half of the year. Getting the firm's device unit back on track will be a huge endeavor for Stu Reed, who was named president of Motorola's Mobile Device business. Most recently, Reed was executive vice president of Motorola's Integrated Supply Chain organization.  

To find out more about Motorola's preliminary second-quarter estimates:
- see this press release [3]
- see this MarketWatch [4] story

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