Deliver Your News to the World

Motorola Announces Third-Quarter Financial Results


WEBWIRE

* Third-quarter sales of $7.5 billion
* Positive operating cash flow of $180 million; total cash position of $7.6 billion
* Separation of the businesses targeted beyond 2009
* Implementing further cost reductions with an estimated annual savings of $800 million in 2009
* Mobile Devices sales of $3.1 billion; shipped 25.4 million handsets
* Home and Networks Mobility sales of $2.4 billion; operating earnings increased to $263 million, an increase of 65 percent compared to the third quarter of last year
* Enterprise Mobility Solutions sales of $2.0 billion; operating earnings increased to $403 million, an increase of 23 percent compared to the third quarter of last year


Click here to view the financial tables which are an integral part of this release: http://www.motorola.com/mot/doc/7/7327_MotDoc.pdf

Click here to view additional financial information: http://phx.corporate-ir.net/phoenix.zhtml?c=90829&p=irol-nongaap

SCHAUMBURG, Ill. – October 30, 2008 – Motorola, Inc. (NYSE: MOT) today reported sales of $7.5 billion in the third quarter of 2008. The GAAP net loss from continuing operations in the third quarter of 2008 was $397 million, or a loss of $0.18 per share. This included net charges of $0.23 per share from highlighted items, which are outlined in the table at the end of this press release.

Greg Brown, Motorola’s co-chief executive officer and CEO of Broadband Mobility Solutions, said, “The company had positive operating cash flow of $180 million and ended the quarter with a total cash* position of $7.6 billion. Our balance sheet and liquidity position give us agility and flexibility in today’s weakened global economy and turbulent financial markets. In addition, we benefit from a global customer base and a broad portfolio of products and solutions that meet the needs of our customers.”

Brown added, “In the third quarter, we continued to expand operating margins in our Home and Networks Mobility and Enterprise Mobility Solutions segments. While we will continue to prioritize investments on opportunities for growth, we are also improving our cost structure across the company by implementing further cost reductions. The initiatives announced today, together with prior actions, will result in total estimated annual savings of $800 million in 2009.”

Sanjay Jha, Motorola’s co-chief executive officer and CEO of Mobile Devices, said, “While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices. We have made progress on various elements of the separation plan and will continue to prepare for a potential transaction at the appropriate timeframe that serves the best interests of the company and its shareholders.”

Jha added, “As part of our plan to rebuild Mobile Devices, we have announced significant actions to accelerate the consolidation of our product platforms and refocus our investment and market priorities. These efforts will result in a leaner organization with a more competitive and cost-effective product portfolio"

Operating results

Mobile Devices segment sales were $3.1 billion, down 31 percent compared to the year-ago quarter. The segment reported an operating loss of $840 million, compared to an operating loss of $248 million in the year-ago quarter. The loss this quarter includes significant charges, primarily related to decisions and plans to consolidate silicon and software platforms and simplify the product portfolio.

Mobile Devices highlights:

* Shipped 25.4 million handsets and began shipping 16 new products to key markets, including three new 3G devices
* Launched Motorola KRAVE™ ZN4, which features two layers of touch - on an interactive clear flip outside and a full touch-screen inside
* Expanded our ROKR portfolio with three new music-optimized devices, the MOTOROKR EM30, MOTOROKR EM28 and MOTOROKR EM25
* Delivered several additional CDMA and companion products, including Motorola Rapture™ VU30, MOTO™ VU204 and MOTOPURE™ H15 Universal Bluetooth® Headset
* Announced AURA™, a high-tier mobile device with timeless, classic design


Home and Networks Mobility segment sales were $2.4 billion, down 1 percent compared to the year-ago quarter. Operating earnings increased to $263 million, which represents an increase of 65 percent compared to operating earnings of $159 million in the year-ago quarter.

Home and Networks Mobility highlights:

* Expanded operating margin year-over-year from 7 percent of sales to 11 percent of sales
* Shipped 4.1 million digital entertainment devices, compared to 2.7 million in the year-ago quarter, due to continued strong demand for HD, HD/DVR and IPTV devices
* Signed multiple contracts worth $431 million with China Mobile Communications Corporation for its GSM network upgrades and expansion
* Announced the multimedia set-top platform and its first implementation with KDDI, an operator in Japan
* Won IPTV contract with Deutsche Telekom in Germany


Enterprise Mobility Solutions segment sales were $2.0 billion, up 4 percent compared to the year-ago quarter. Operating earnings increased to $403 million, which represents an increase of 23 percent compared to operating earnings of $328 million in the year-ago quarter.

Enterprise Mobility Solutions highlights:

* Expanded operating margin year-over-year from 17 percent of sales to 20 percent of sales
* Continued to realize strong international demand in the government and public safety markets
* Launched APX™, the industry’s first Project 25 multi-band radio with multi-agency interoperability, dual-sided portable operation and integrated GPS
* Completed acquisition of AirDefense, a leading wireless LAN security provider, subsequent to the end of the quarter
* Signed a definitive agreement to sell the biometrics business to SAFRAN, subsequent to the end of the quarter


Fourth-quarter and full-year 2008 outlook
The company expects to report earnings from continuing operations in the range of $0.02 to $0.04 per share in the fourth quarter of 2008 and full-year earnings per share in the range of $0.05 to $0.07. 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.

Conference call and webcast
Motorola will host its quarterly conference call beginning at 8 a.m., Eastern Time (USA) on Thursday, October 30, 2008. The conference call will be webcast live with audio and slides at www.motorola.com/investor.

Definitions
* Total cash equals Cash and cash equivalents plus Sigma fund (current and non-current) plus Short-term investments

Business Risks
This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to statements about: 1) cost savings from cost reduction actions; 2) the timeframe for our plans to separate the Company; and 3) Motorola’s financial outlook for the fourth quarter and full-year of 2008. Motorola cautions the reader that the risk factors below, as well as those on pages 18 through 27 in Item 1A of Motorola’s 2007 Annual Report on Form 10-K and in its other SEC filings, could cause Motorola’s actual results to differ materially from those estimated or predicted in the forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to: (1) the Company’s ability to improve financial performance and increase market share in its Mobile Devices business, particularly in light of anticipated slowing demand in the global handset market; (2) the level of demand for the Company’s products, particularly in light of global economic conditions which may lead consumers, businesses and governments to defer purchases in response to tighter credit and negative financial news; (3) the Company’s ability to introduce new products and technologies in a timely manner; (4) the possible negative effects on the Company’s business operations, financial performance or assets as a result of its plan to create two independent, publicly traded companies; (5) unexpected negative consequences from the Company’s ongoing restructuring and cost-reduction activities, including as a result of significant restructuring at the Mobile Devices business; (6) negative impact on the Company’s business from the ongoing global financial crisis and severe tightening in the credit markets, which may include: (i) the inability of customers to obtain financing for purchases of the Company’s products; (ii) the viability of the Company’s suppliers that may no longer have access to necessary financing; (iii) reduced value of investments held by the Company’s pension plan and other defined benefit plans; (iv) fair and/or actual value of Company’s debt and equity investments could differ significantly from the fair values currently assigned to them, including as a result of additional impairments in the Company’s Sigma Fund; (v) counterparty failures negatively impacting the Company’s financial position; and (vi) increased cost to the Company to obtain financing; (7) the economic outlook for the telecommunications and broadband industries; (8) the Company’s ability to purchase sufficient materials, parts and components to meet customer demand, particularly in light of global economic conditions; (9) risks related to dependence on certain key suppliers; (10) the impact on the Company’s performance and financial results from strategic acquisitions or divestitures, including those that may occur in the future; (11) risks related to the Company’s high volume of manufacturing and sales in Asia; (12) the creditworthiness of the Company’s customers and distributors, particularly purchasers of large infrastructure systems; (13) variability in income received from licensing the Company’s intellectual property to others, as well as expenses incurred when the Company licenses intellectual property from others; (14) unexpected liabilities or expenses, including unfavorable outcomes to any pending or future litigation or regulatory or similar proceedings; (15) the impact of foreign currency fluctuations, including the negative impact of the strengthening U.S. dollar on the Company when competing for business in foreign markets; (16) the impact on the Company from continuing hostilities in countries where the Company does business; (17) the impact on the Company from ongoing consolidation in the telecommunications and broadband industries; (18) the impact of changes in governmental policies, laws or regulations; (19) the outcome of currently ongoing and future tax matters; and (20) negative consequences from the Company’s outsourcing of various activities, including certain manufacturing, information technology and administrative functions. Motorola undertakes no obligation to publicly update any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.

About Motorola
Motorola is known around the world for innovation in communications. The company develops technologies, products and services that make mobile experiences possible. Our portfolio includes communications infrastructure, enterprise mobility solutions, digital set-tops, cable modems, mobile devices and Bluetooth accessories. Motorola is committed to delivering next generation communication solutions to people, businesses and governments. A Fortune 100 company with global presence and impact, Motorola had sales of US $36.6 billion in 2007. For more information about our company, our people and our innovations, please visit www.motorola.com.



WebWireID78634





This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.