Motorola shares sank to a two-year low as analysts said there was no immediate end in sight for the cell phone maker's financial problems, an Associated Press report said.
The Associated Press report said analysts rushed to downgrade the company's stock one day after Motorola shuffled its top management and announced its first-quarter sales would fall more than $1 billion short of earlier projections.
'We believe it will take Motorola more than one year to turn around its handset business,' Davenport & Co. analyst F. Drake Johnstone was quoted by the Associated Press report, as saying.
Motorola said slumping sales in its mobile phone unit, which accounts for more than two-thirds of its sales, are largely to blame for is shortfall, the report said.
Earlier this year, CEO Ed Zander pledged the mobile phone unit would return to double-digit operating profitability in the second half of 2007, the report said.
Motorola said it also would report a first-quarter loss in mid-April. The company said it now expects sales for the January-to-March quarter of $9.2 billion to $9.3 billion, the report said.
The report further said Motorola expects sales, profitability and operating cash flow for the full year to be 'substantially' below its prior guidance.