Motorola Inc. (NYSE: MOT) provided a little something for everyone with its September quarter results. More importantly, it also confirmed for investors that it’s going to be quite a while before this puppy is hitting on all cylinders again. (See Moto Reports Q3.)

At the corporate level, revenue in the quarter was $7.48 billion (-15% Y/Y; -7% Q/Q) and was a tad light versus consensus expectations of $7.82 billion. The GAAP loss per share came in at$ 0.18 and included $770 million in pre-tax charges associated with a variety of changes being implemented as a result of the appointment of Dr. Sanjay Jha as the new CEO of the company’s Mobile Devices business. (See Sanjay Jha Named Co-CEO of Motorola.) Excluding those charges, the pro forma earnings per share were $0.05 versus the street’s expectations of $0.02.

I don’t think anyone in his or her right mind did not expect changes to be made quickly. However, the changes Dr. Jha discussed on the conference call raised more than a few eyebrows for a variety of reasons.

Mobile Devices has been the bane of Motorola for the last two years, and the September quarter did little to change that. Revenue was $3.12 billion, down 31 percent from last year and 7 percent sequentially. However, despite having introduced 16 new models in the quarter, units shipped were 25.4 million, down on a year-to-year and sequential basis. If we again exclude the charges associated with the restructuring operations, Mobile Device’s operating loss improved versus last year and the prior quarter, but it’s still an operating loss. Realistically, the only positive to be taken from the results was a 3 percent sequential increase in average selling price to $122.68. Wow!

What makes Motorola’s Mobile Device business an ongoing soap opera is the fact that it has been undergoing restructuring for the last two years, and it still stands at the starting line in a number of respects. The company has cut more than $700 million in operating expenses, most from Mobile Devices, in the first nine months of 2008 versus the same period a year ago. In fact, Mobile Devices is expected to exceed the $600 million in savings for 2008 that management had targeted earlier in the year. However, despite the lower expense levels, it remains unprofitable.

In a very telling statement to highlight the issues Mobile Devices faces internally, Dr. Jha announced that the company was currently supporting 20 different combinations of silicon, software, and user interface. This is ludicrous! If he’s able to “discover” this problem after fewer than 90 days on the job, it makes one wonder just what the previous managers have been doing for the past two years.

As part of Mobile Devices’ “new” approach, the company will use only three software platforms (Android, Windows Mobile, and P2K), down from five. On the silicon side, the big loser is Freescale Semiconductor Inc. (no shock there). Freescale will continue to supply 2G parts, but that’s essentially the end of the line with Motorola. Dr. Jha announced that Motorola essentially bought their way out of the contract for future purchases at Freescale, with most future silicon coming from Qualcomm Inc. (Nasdaq: QCOM) and Texas Instruments Inc. (NYSE: TXN).

A little more disturbing in Dr. Jha’s comments was the announcement that Mobile Devices will focus more on some geographic areas than others. North America and Latin America were at the top of his list as well as “certain markets in Asia.” When queried about the Asia comment, he indicated that China would certainly be a focus but that India, because it generated lower gross margins, would get less emphasis. Given the fact that much of the industry’s unit growth derives from non-China Asia/Pacific, it makes me wonder what Motorola is going to do for growth?

Aside from the geographic issues, Dr. Jha didn’t exactly paint a happy picture for Mobile Devices over the next two or three quarters either. While Moto will have many more new devices hitting the stores for the holiday season (muted though it may be), it’s whiffed when it comes to the only “hot product” category out there – smartphones. Dr. Jha noted that some U.S. service providers are suggesting that as much as 30 percent of their unit volumes will be smartphones, but that Motorola’s offerings there are rather “limited” to say the least. In essence, you won’t see much of a push in this segment by Motorola until the second half of 2009. It almost sounds as if they were out sick the day of the original iPhone introduction nearly 18 months ago.

Obviously, Motorola is not just Mobile Devices, but that’s where most of the problems come from. Home & Networks Mobility (HNM) revenue was $2.37 billion, down 1 percent from the year-ago period and 14 percent sequentially, as cable and video solutions remain strong for the company. Enterprise Mobility (EM) revenue was $2.03 billion, up 4 percent Y/Y and down 1 percent Q/Q. The Government & Public Safety segment produced very solid results, but the Enterprise segment has started to see softness and push-outs.

As part of the new “restructuring” program, Motorola is expected to cut another $800 million in operating expenses in 2009 versus 2008 levels, with $600 million of that from Mobile Devices alone. However, even with those savings, the best that can be said for the unit is that its operating loss in 2009 should improve from the 2008 level. Now, there’s a vote of confidence! Consequently, with economic issues, turmoil in the financial markets, and all the new changes in Mobile Devices, the company is delaying its previously announced split of the company into two separate units. This was to have occurred in third-quarter 2009, and, given the difficulty, it won’t surprise me if it ultimately gets delayed indefinitely.

Overall, Motorola actually had a fairly decent quarter on an execution basis. But there is obviously a lot of work still to do, and it’s going to take several quarters until we begin to see dramatically improved results.

Position: The Telecom Connection model portfolio is long MOT, QCOM.

— Bob Faulkner, Special to Unstrung. Motorola is one of the many technology and telecom companies that Bob Faulkner writes about weekly in The Telecom Connection.