Motorola Announces Third-Quarter Sales and Earnings
* GAAP earnings from continuing operations of $0.02 per share, including net charges of $0.04 per share from highlighted items
* Sales of $8.8 billion
* Financial improvements in the Mobile Devices business
* Enterprise Mobility Solutions business continues to deliver strong results
* Positive operating cash flow of $342 million and reduced cash conversion cycle to 43 days
SCHAUMBURG, Ill. – Motorola, Inc. (NYSE: MOT) today reported sales of $8.8 billion for the third quarter of 2007. The GAAP earnings from continuing operations for the third quarter of 2007 were $0.02 per share, which includes net charges of $0.04 per share related to charges associated with previously announced workforce reductions and a write-down of intangible assets.
“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,” said Ed Zander, chairman and chief executive officer. "We have strengthened our leadership position in broadband video, WiMAX, next generation government and public safety and the enterprise mobility markets. With our focus on these key opportunities and the initiatives we are taking in mobile devices we will further improve our performance and create long-term shareholder value.”
“During the third quarter, we maintained our focus on increasing cash flow, enhancing profitability and driving growth,” said Tom Meredith, chief financial officer. “We are beginning to see improvements in our cash conversion cycle and operating cash flow which will lead to increased financial flexibility.”
Mobile Devices segment sales were $4.5 billion, down 36 percent compared with the year-ago quarter. Excluding highlighted items, the segment incurred an operating loss of $138 million, compared with operating earnings of $843 million in the year-ago quarter. Motorola’s share of the global handset market for the quarter is estimated to be 13 percent.
During the quarter, Mobile Devices:
* Shipped 37.2 million handsets -- including more than 900,000 RAZR 2 devices.
* Introduced the MOTO U9 music device, a special edition RAZR 2 for the holiday season, seven new W-Series handsets, and the iC602 dual-mode iDEN/CDMA device.
* Expanded the Z6 line with the introduction of ROKR Z6m and Z6tv.
* Introduced an ultra high speed WiMAX chipset solution, optimized for both size and low power consumption.
Home and Networks Mobility had segment sales of $2.4 billion, up 6 percent compared with the year-ago quarter. Excluding highlighted items, operating earnings were $165 million, compared with operating earnings of $231 million in the year-ago quarter.
During the quarter, Home and Networks Mobility:
* Shipped its two millionth IPTV set-top device, just five months after reaching the one million milestone.
* Strengthened portfolio with several strategic acquisitions including Leapstone Systems, Modulus Video, and Terayon Communications.
* Conducted the world’s first WiMAX 802.16e mobile handoff during the WiMAX World Conference in Chicago.
* Announced plans to divest the embedded communications computing business for $350 million in cash.
Enterprise Mobility Solutions had segment sales of $2.0 billion, up 47 percent compared with the year-ago quarter. Excluding highlighted items, operating earnings were $336 million, compared with operating earnings of $280 million in the year-ago quarter.
During the quarter, Enterprise Mobility Solutions:
* Launched MOTOTRBO, a dual-mode digital 2-way communications platform that integrates voice and data, in key markets in Asia and Latin America.
* Awarded several county-wide public safety contracts in North America.
* Shipped the one millionth MC9000, the industry leading rugged mobile computer.
* Started shipping the MC17 mobile computer, aimed at retail, in-store applications for enhanced personal shopping experiences.
The company’s outlook for earnings per share from continuing operations in the fourth quarter is $0.12 to $0.14. This outlook excludes any reorganization of business charges associated with the company’s operating expense reduction initiatives, as well as any other items of the variety highlighted by the company in its quarterly earnings releases.
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