Motorola ships 5.1M smartphones in Q1, still awaiting close of Google acquisition
Motorola Mobility (NYSE:MMI) said it shipped 5.1 million smartphones during the first quarter. The company, which reported a slightly larger net loss than it did in the year-ago period, is still waiting for Google's (NASDAQ:GOOG) $12.5 billion purchase of the company to get approved by Chinese regulators before the deal closes.
The handset maker, which did not host an analyst conference call about its earnings due to the pending acquisition, reported a net loss of $86 million, wider than its $81 million net loss from the year-ago period. Motorola posted net revenue of $3.1 billion, up slightly from the year-ago quarter. Revenues in its mobile devices business, which heavily depends upon Android smartphone sales, climbed 3 percent to $2.2 billion.
Motorola said it shipped 8.9 million handsets, including 5.1 million smartphones, in the quarter. That compares to 9.3 million mobile devices and 4.1 million smartphones in the first quarter of 2011. Motorola did not reveal how many tablets it sold in the first quarter, something it did for every quarter during 2011.
Motorola said both it and Google "continue to work closely with the authorities in China for approval on the acquisition. The transaction has been investigated and cleared without conditions in all other jurisdictions with pre-closing clearance requirements." The deal is still expected to close in the first half of 2012, Motorola said.
A recent Wall Street Journal report said the two companies are still sorting through how search giant Google will integrate a hardware firm. The report, which cited unnamed sources at Google and Motorola as well as others outside, said that many think Google believes it can maintain the high margins of its core Internet business while taking on a company with lower hardware margins. In the first quarter, Motorola's mobile device unit reported an operating loss of $121 million, while its set-top box business reported operating earnings of $68 million.
The report also said Google thinks it can remain neutral among Android licensees while owning a large Android smartphone vendor. The report, citing unnamed sources close to Google, said Google plans to make a "substantial investment" in money and talent in Motorola so that Motorola can build "truly innovative devices."
Meanwhile, a February Bloomberg report said that Google will replace Motorola CEO Sanjay Jha with Google executive Dennis Woodside once the deal closes. Jha's total pay more than tripled in 2011 compared to 2010, to more than $47 million, mainly thanks to big jumps in grants of stock and stock options.
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