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Motorola swings to profit amid rising smartphone sales

Thu, 04/29/2010 - 8:30am
Maisie Ramsay, Wireless Week

Motorola posted an unexpected profit today amid rising sales of smartphones and increased profitability across all of its segments.

Motorola had expected to lose between $0.01 and $0.03 per share in the first quarter. Instead, the company managed to eke out a profit of $0.03 per share.

Overall, the company made $69 million on sales of $5.04 billion compared to last year’s loss of $231 million on sales of $5.37 billion.

Motorola shipped 2.3 million smartphones, a sequential increase from last quarter, when it shipped 2 million smartphones.

"We are in a strong position to improve our share in the rapidly growing smartphone market, particularly in light of our competitive portfolio, strengthened brand and improved carrier relationships,” said Motorola’s device unit chief Sanjay Jha.

Motorola launched six new Android-based smartphones during the quarter, including the Backflip and Devour, and launched its SHOP4APPS apps store in China.

Despite the improvement in smartphone sales, Motorola’s total device shipments posted sequential and year-over-year declines. The company shipped 8.5 million devices in the first quarter, compared to 12 million devices in the fourth quarter and 14.7 million devices during the same period last year.

Net sales in Motorola’s device segment slipped 9 percent to $1.64 billion, but the division’s profitability improved. The company narrowed its losses in the mobile device segment to $192 million compared with last year’s loss of $545 million.

Motorola’s operating earnings in its home, enterprise mobility and networks segments also improved.

Motorola gave an upbeat forecast for the second quarter of 2010. The company expects to make between $0.07 to $0.09 per share, excluding stock-based compensation and amortization of intangibles expenses of about $0.04 per share.

Motorola’s stock rose over 4 percent to $7.22 as of 11 a.m. EST.

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