Motorola reports 94% drop

Source: Technology Digital

Date :10/25/2007 11:14:34 AM

Motorola Inc has reported a steep 94 percent drop in net profit as handset sales plunged in its third-quarter.

Motorola posted a $60 million profit during the third quarter, below Wall Street expectations and compared with $968 million in the same quarter last year.

Revenue fell from $10.6 billion last year to $8.81 billion. The company has been experiencing problems after cutting prices on their mobile phones to increase market share at the expense of the profit margin.

For the first nine months, Motorola recorded a $149 million loss on sales down 13 percent at $30 billion.

Motorola sold 37.2 million handsets in the quarter - more than analysts had expected however it posted a 36 percent decline in the sales versus last year’s earnings of $843 million.

The company insisted that strategic changes were helping to improve its operating cash flow.

Optimism

Motorola has a more optimistic view of the fourth quarter, projecting earnings from continuing operations of twelve cents to 14 cents a share where analysts were expecting earnings of ten cents.

"We see the industry growing in the double-digit-plus range," said Greg Brown, president and chief operating officer. He added the company would be pushing more 3G, phones, as demand increases.

Motorola's share of the global handset market suffered a 50 basis point drop from the second quarter on increasing competition from global leader Nokia Corp. and strong growth from rivals Samsung Electronics Co. Ltd. and LG Electronics Inc.

Chief executive, Ed Zander said: “We are pleased with the improvement in the financial performance of mobile devices and we look forward to building upon the progress we have made.”

October 25 2007

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