Motorola (NYSE:MOT) announced it will officially split into two separate companies on Jan. 4. The firm--which announced earlier this year that it would split into two companies called Motorola Solutions and Motorola Mobility Holdings--is putting its final plans in place to make the switch.
As expected, Motorola co-CEO Greg Brown will lead the Solutions company, which will include Motorola's enterprise mobility and network infrastructure units, and co-CEO Sanjay Jha will lead the Mobility company, made up of Motorola's handset unit and set-top box division.
Motorola's board also approved a 1-for-7 reverse stock split to help build up Motorola's share price ahead of the split through a tax-free dividend. Once Motorola splits in two, Motorola Solutions will begin trading on the New York Stock Exchange under the ticker symbol "MSI" and Motorola Mobility will trade under the symbol "MMI."
In a research note, financial analyst Maynard Um of UBS said he expects Motorola Mobility to face some competitive pressure as it heads into the first quarter of 2011. He said Motorola will need to broaden distribution beyond its largest customer, Verizon Wireless (NYSE:VZ), which has in the past pushed Motorola products but in the coming year could spread that support to additional device vendors.
In the third quarter, Motorola posted net profit of $109 million, up from $12 million in the year-ago period. The company's revenue jumped 13 percent in the quarter to $4.9 billion, making it Motorola's first year-over-year revenue increase since the fourth quarter of 2006.
- see this WSJ article (sub. req.)
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