Motorola revives profit; revenue still down

Motorola defied a 32% slump in sales to post a narrow Q2 profit of €18.4 million, up from €2.8 million a year ago.

Total revenue dived 32% to €3.9 billion and the handset division continues to bleed red ink. Device sales sank 45% to €1.27 billion, even though it device shipments grew to 14.8 million from 14.7 million in Q1. Motorola estimates its share of the handset market to be 5.5%.

The division narrowed its operating loss to €178 million from €245 million a year before. The company still intends to spin off its handset division in the near future and will introduce Android-based handsets for the Christmas season in the hope of reversing a sales decline and compete with RIM and Apple.

“The devices we are launching in time for the holiday season will get us back in the game for smart phones,” co-CEO Sanjay Jha.

Motorola has secured deals with carriers in Europe and is planning to launch Android handsets there and in South America during Q4, Jha said.  

The vendor has slashed 8,000 jobs since December as part of its cost-cutting program.

The dismal sales performance over the last three years has been attributing to its inability to follow-up phone on the 2004 success of Razr.  Earlier this year Motorola executives warned that they didn’t expect the company to be restored to profitability this year.