During the quarter, the company continued to maintain a very strong balance sheet, generating operating cash flow from continuing operations of $1.6 billion, its 23rd consecutive quarter of positive operating cash flow. In addition, the company repurchased 62 million shares of its stock for $1.5 billion.
"While our third-quarter sales were slightly below our guidance, we are pleased with our earnings. Each of our business segments and total Motorola improved operating margin versus the second quarter of 2006, excluding highlighted items. Mobile Devices again achieved record unit shipments and sequentially improved its market share versus the second quarter," said Ed Zander, chairman and CEO. "During the quarter, GSM infrastructure sales in the Europe, Middle East and Africa region were weaker than anticipated due to customer delays in capital spending. Additionally, sales of iDEN mobile devices were lower, caused by customer inventory reductions in anticipation of new dual-mode device shipments in the fourth quarter. With our strong balance sheet, leadership technologies and proven record of growth, Motorola is well positioned to continue creating value for its shareholders as one of the world's leading technology companies."
Mobile Devices Segment sales were $7.03 billion, up 26 percent compared with the year-ago quarter. Operating earnings increased to $819 million, including a charge of $16 million for acquisition-related in-process research and development, compared with operating earnings of $593 million in the year- ago quarter. Excluding highlighted items, the segment's operating margin improved to 11.9 percent versus 11.2 percent in the second quarter of 2006 and 11.0 percent in the year-ago quarter, as a result of new product launches, supply chain cost reductions and higher technology and platform licensing- related income. During the quarter, Mobile Devices also:
- Shipped 53.7 million units, up 39 percent compared to the third quarter of 2005 -- and up 3.6 percent compared to 51.9 million handsets shipped during the second quarter of 2006.
- Captured headlines by launching the highly anticipated MOTOKRZR handset, which is creating excitement among customers and consumers eager to have the industry's newest ultra-slim and ultra-stylish handset.
- Expanded global market share to an estimated 22.4 percent, up 3.8 percentage points from a year ago and up 0.3 percentage points from the second quarter of 2006.
- Continued brand strength and market-share leadership in the Americas, solid No. 2 position in Asia (approximately 23 percent in China and 15 percent in India), while continuing popularity among consumers in Europe, the Middle East and Africa as new products prepared to launch and drive demand for the fourth quarter.
- Signed a five-year supply agreement for iDEN handsets with NII Holdings, Inc. -- Motorola's largest customer for iDEN technology outside of the United States.
- Launched eight new handsets: three for GSM, three for CDMA and two for