Motorola Back in Black

Motorola’s (MOT) ambitious turnaround strategy is beginning to pay off. Reporting first quarter earnings this morning, the company posted a profit of $69 million, or three cents a share, compared with a loss of $231 million, or 10 cents a share, a year earlier. At $5.04 billion, revenue was down about 6.1 percent.

Analysts had been expecting Motorola to lose two cents a share on $5.1 billion in sales, so its performance for the quarter was something of a surprise.

While Motorola fell short of forecasts for total handset shipments, smartphones performed quite a bit better than expected. Analysts figured the company would ship about 10 million handsets in the first quarter, 1.8 million of them smartphones. Instead, Motorola shipped 8.5 million handsets. But of those, 2.3 million were smartphones. Good news for a company preparing to spin off its handset business.

“It was a good quarter in the face of cautious expectations,” Avian Securities analyst Matthew told Reuters. “The smartphone numbers look good and the profitability looks good and they generated nice cash.”