Motorola: Do We Qualify for a TARP Bailout Yet?
Motorola’s first-quarter results came in stronger than expected, although that’s not saying much because the situation at the ailing wireless handset maker appears to be increasingly dire.
Motorola (MOT) shipped about 19.2 million handsets in the fourth quarter, compared with about 41 million in the year-ago period. In its latest quarter, the company shipped just 14.7 million handsets, down 23 percent from the previous one. An ugly downward trend and one that–with the company’s new Android handsets still a ways off–will only get worse before it gets better.
Motorola’s mobile device division’s operating loss grew to $509 million as sales plummeted 45 percent to $1.8 billion. That’s an improvement over the $595 million the division lost in the fourth quarter of 2008, but again, that’s not saying much. Sure, cost cuts are making a difference, but how much of a difference is that, really, when your handset shipments have been halved in the last year?
And there’s more cause for concern. Motorola’s home entertainment and emergency-response communications divisions, which have bolstered its earnings in the past, have also begun to suffer. The econalypse undermined sales and profits in both divisions in the first quarter. End result: a net loss for the company of $231 million, or 10 cents a share, on revenues down about 28 percent to $5.37 billion from $7.45 billion a year ago. Excluding charges, that loss came in at eight cents. That’s better than analysts’ averaged loss forecast of 11 cents, but again given what I’ve outlined above, it’s not saying much.
For the second quarter, Motorola believes it will loses three cents to five cents a share. The Street’s expecting a loss of five cents a share.