Motorola posted lukewarm Q1 sales of $9.43 billion and a net loss of $181 million, thanks to its handset business--once again--which brought in $5.4 billion in sales, down 15 percent year-on-year. The handset business also contributed a $231 million operating loss, compared with operating earnings of $701 million year-on-year. Motorola said acquisition costs factored into its operating losses, since it acquired four companies recently: Symbol, Tut, Netopia and Good. During Q1 Motorola shipped 45.4 million handsets, which it claims was 17.5 percent of the global handset market. Second-quarter shipments will be flat in comparison, Motorola predicted. As we have noted before, the company has been selling more cheap phones, which makes for less profit, and its RAZR line of handsets is no longer the dependable cash cow it once was.
CEO and chairman Ed Zander said the company should be back in the black by the end of this year as it accelerates its share-buyback program, streamlines its product portfolio, introduces more Linux and Java-based phones and carries out the previously announced job cuts. The company plans to do all that while trying to keep activist investor Carl Icahn at bay.
RBC analyst Mark Sue noted: "It's got to stop getting worse before it gets better and we're looking for another bumpy ride in [the second quarter] as channel inventories clear and Motorola adjusts its mobile devices business model."