Motorola posted a $3.6 billion net loss in the fourth quarter of 2008, mainly related to non-cash charges for goodwill write-downs and an increase in a deferred tax reserve, as the company's beleaguered handset division reported a sharp drop in sales and continued to falter.
The company suspended its quarterly dividend and announced that Edward Fitzpatrick, a senior vice president and corporate controller, has been named to replace CFO Paul Liska, effective immediately. Motorola said it has begun a search for a permanent replacement. Motorola also reaffirmed its commitment to spinning off the handset division, but said that because of the handsets division's financial status and market instability, the separation would be delayed for the time being.
Motorola's mobile devices division continued its slump, with sales of $2.35 billion, down 51 percent compared with the year-ago quarter. The company shipped 19.2 million handsets in the quarter, down 53 percent from the 40.9 million in the fourth quarter of 2007. The division had an operating loss of $595 million, compared to an operating loss of $388 million in the year-ago quarter. The division had a 6.5 percent global market share and its average selling price in the quarter was $123, relatively flat from the year-ago period.
Motorola announced in mid-January that it would be cutting 4,000 jobs, 3,000 of which would come from the mobile devices division. This follows the 3,000 job cuts that were announced last fall. The company said Tuesday that these cuts would save $1.5 billion in 2009, including $1.2 billion for the handset division.
Co-CEO Sanjay Jha, the head of the mobile devices division, reaffirmed the company's commitment to developing and launching phones based on Google's Android platform. Jha said the phones would be differentiated by their integrated social networking capabilities.
He said Motorola's experience working with Linux Java modules in the past would give it a leg up on competitors, even if they got their Android-based phones to market before Motorola. Jha also said Motorola remained committed to Windows Mobile, refuting rumors that it was not supporting the OS, and said Motorola would continue supporting the platform into 2010, as Windows 7 launched.
For more:
- see this article [1] (sub. req.)
- see FierceWireless' handset metrics special report [2]
- see this article [3]
- see this release [4]
Related Articles:
Report: Motorola [5] executives leaving amid job cuts, uncertainty
Motorola [6] to cut Windows Mobile positions
Motorola [7] to cut 4,000 more jobs amid drop in sales
Motorola [8] freezes pension plans, salaries; execs take pay cuts
Motorola's [9] losses grow; firm will focus on Android, WinMo
Links:
[1] http://online.wsj.com/article/SB123359016405939667.html
[2] http://www.fiercewireless.com/special-reports/handset-vendor-metrics-0
[3] http://www.marketwatch.com/news/story/motorola-names-edward-fitzpatrick-acting/story.aspx?guid={BDCD7DAC-366E-4B5A-84EC-100F630BA863}&dist=msr_1
[4] http://media.corporate-ir.net/media_files/irol/90/90829/020309/845326_Q4_2008_Earnings_Press_Release_and_Financial_Tables.pdf
[5] http://www.fiercewireless.com/story/report-motorola-executives-leaving-amid-job-cuts-uncertainty/2009-02-02
[6] http://www.fiercewireless.com/story/motorola-cut-windows-mobile-positions/2009-01-26
[7] http://www.fiercewireless.com/story/motorola-cut-4-000-more-jobs-amid-drop-sales/2009-01-14?utm_medium=rss&utm_source=rss&cmp-id=OTC-RSS-FW0
[8] http://www.fiercewireless.com/story/motorola-freezes-pension-plans-salaries-execs-take-pay-cuts/2008-12-17
[9] http://www.fiercewireless.com/story/motorola-posts-large-loss-focus-android-windows-mobile/2008-10-30