Motorola's lower profits blamed on networks

Motorola just can't seem to make investors happy. The vendor said first-quarter profits slipped despite the fact that the company shipped a record 46.1 million handsets, primarily Razr handsets. Investors promptly drove Motorola's stock down in after-hours trading yesterday. However, CFO David Devonshire blamed the overall decline on lower sales and earnings in the networks division. "We don't expect this to continue through the second half," he said. Net income fell to $686 million, or 27 cents a share, from $692 million, or 28 cents, a year earlier.

In fact, Motorola management said it is now the No. 1 supplier at Verizon Wireless. While some analysts are concerned Motorola will ride the Razr train a bit too long, research firm UBS says Motorola still has unannounced handsets slated for the second half of the year, including a W-CDMA device for Cingular, a CDMA/iDEN phone for Sprint and possibly an even narrower version of the Razr. That should be interesting.

For more about Motorola's Q1 results:
- read this article from The Wall Street Journal (sub. req.)