Motorola also said it would report "modest" non-GAAP profitability, whereas analysts were expecting non-GAAP earnings of $0.41 per share.
The company did ship 5.3 million smartphones in the quarter, up from 4.9 million in the previous year's fourth quarter. But it shipped fewer handsets overall: 10.5 million, compared with 11.3 million a year earlier.
Why this matters
It's interesting that Motorola spelled out legal costs as one reason for the weakness in profits. It seems as if patent litigation is a major part of any smartphone player's business these days, and apparently, those costs are starting to add up. The company should soon have the bankroll of Google (Nasdaq: GOOG) to help with those costs.
Of course, Motorola has a lot of other things going on. Intensified competition in smartphones was another reason the company cited for Friday's announcement, and Motorola already announced a layoff of 800 in October.
Recent Moto headlines:
- ITC Makes a Moto/Microsoft Ruling
- Moto Beats Apple in German Court
- Moto Mobility Braces for Layoffs
- Moto Ships 4.8M Smartphones Amid Q3 Losses
— Craig Matsumoto, West Coast Editor, Light Reading