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Motorola profits slide, but Connected Home division connects in Q4

Fri, 01/19/2007 - 6:24am
Jeff Baumgartner, CED

Motorola's Connected Home Solutions division posted Q4 revenues of $980 million, up 39 percent from a year ago, while annual sales rose 16 percent, buoyed by strong shipments of set-tops, modems and IP network infrastructure gear.

That division "knocked the cover off the ball," Motorola Chairman & CEO Ed Zander said Friday during a call with reporters and analysts.

The Connected Home Solutions division shipped more than 10 million digital video entertainment devices (i.e. set-tops) in the quarter, and shipped more than 10 million modems during the year.

Despite strength from the Connected Home Solutions division and generally solid sales, Motorola said Q4 profits dipped 48 percent. Overall revenue was $11.8 billion, up 17 percent from a year ago.

Looking ahead, Motorola said sales for Q1 2007 are expected to be in the range of $10.4 billion to $10.6 billion.

"While we achieved our financial goals in our network and enterprise and Connected Home segments, and I have many positive things to say about the quarter, we did have challenges in our mobile device business," Zander said during Friday's earnings call.

Although Motorola made some pricing moves on some mobile products, including its RAZR line in Q3, "the forecast of geography and mix of new product shipped during Q4 didn't meet the gross margin dollar targets, plain and simple," he added.

Motorola shipped a record 66 million handsets in the quarter, up 47 percent versus the year earlier.

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