Light Reading
Motorola Home is now considered 'discounted operations' – in the eyes of Google's accountants, anyway

Closing the Door on Motorola Home

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
1/18/2013
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Google's pending $2.35 billion sale of Motorola Mobility LLC's Home unit to Arris Group Inc. isn't expected to close until about April, but it's going to feel a bit more real soon enough. (See Google Sells Moto Home to Arris for $2.35B and Arris CEO: Cable Operators Urged Moto Home Buy.) Google VP, Treasurer and Chief Accountant Brent Callinicos blogged that the company will start to treat Motorola Home as "discontinued operations," meaning Google will break out Home's numbers in its consolidated statements of income in its fourth-quarter 2012 and first-quarter 2013 financial results. "While this is a standard accounting treatment … people who follow our company may not be fully aware of how it impacts our financial reporting," the Google exec wrote, noting that the "majority" of Wall Street analysts who follow Google have not reflected Moto Home as a discounted operation in their estimates. So the number re-crunching has ensued ahead of Google's fourth-quarter earnings next Tuesday (Jan. 22). Among examples, Sanford C. Bernstein & Co. Inc. analyst Carlos Kirjner cut his Google fourth-quarter revenue estimate from US$13 billion to $12.2 billion. Kirjner also reduced his 2013 GAAP earnings per share estimate for Google to $40.36 (5 percent above Wall Street consensus) from $40.93. We'll know the numbers soon enough, but he estimates that Motorola Home generated GAAP operating income of $59 million on revenues of $844 million. — Jeff Baumgartner, Site Editor, Light Reading Cable



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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/18/2013 | 5:49:17 PM
re: Closing the Door on Motorola Home
Google's down $9.72 (1.37%) to $701.60 each in mid-day trading Friday. Kirjner, by the way, kept his outperform rating on the stock, with -a 12-month price target of $820.
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