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Handsets still giving Moto the blues

Thu, 04/30/2009 - 8:35am
Brian Santo

Ever-drooping handset sales continue to dog Motorola, contributing greatly to another quarterly loss. Sales in the company’s Mobile Devices unit, which hasn’t had a hot product since the introduction of the Razr years ago, were down 45 percent.

By way of comparison, sales in the Home & Network Mobility and Enterprise Mobility Solutions units were down 16 percent and 11 percent, respectively. 

Motorola reported overall sales of $5.4 billion in its first quarter of 2009, and a net loss of $231 million.

During the quarter, The Home & Networks Mobility unit was passed over for contracts to build-out Long Term Evolution, or LTE, a next-generation wireless network technology. Co-CEO Greg Brown said the company will stay in the LTE game and hopes to get a contract award later this year, the AP reported.

Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, expects the combination of cost management with new smartphone products based on Google’s Android operating system being readied for the end of the year to lift the handset division. He said, “We plan to have differentiated Android-based devices in stores in time for the fourth-quarter holiday season.”

The company burned through $1.3 billion in cash during the quarter. By the end of the quarter it had $6.1 billion, down from $7.4 billion at the end of 2008. The cash decline was driven in large part by a $700 million reduction in accounts receivable sold and approximately $200 million in restructuring-related payments. Motorola said it expects to generate positive cash flows in the second half of the year, however, through improved earnings and continued working capital improvements.

Motorola said its outlook for the second quarter is a more modest net loss from continuing operations of 3 cents to 5 cents per share (this quarter’s net loss equaled 13 cents per share).

More Broadband Direct 04/30/09:
•  Comcast's Q1 profit up 6% on new subs
•  Clyburn tapped to fill FCC seat
•  Handsets still giving Moto the blues
•  Arris' Q1 revenue down; CEO upbeat about future
•  JDSU impeded by economy
•  Pohl, Braun join BigBand Networks' board
•  Verivue offers design details
•  Cogeco selects Highdeal for billing
•  Exfo debuts HPNA test probe
•  Broadband Briefs for 04/30/09

 

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