The Schaumburg, Ill.-based phone vendor lost $231 million ($0.13 per share), compared to $194 million ($0.9 cents per share) during the same time last year. (See Moto Reports Q1.)
Table 1: Motorola's Q1 Results
|Net Loss ($B)||0.194||0.231||-19%|
|Source: Motorola Inc.|
Analysts polled by Thomson Reuters had been expecting a loss of $0.11 a share, two pennies lower than what Moto posted. This figure, however, includes net income of $0.03 per share from discontinued operations. Excluding this one-time charge, Motorola posted a net loss per share of $0.10.
The company is now predicting a net loss from continuing operations of $0.03 to $0.05 per share for the second quarter. Analysts are predicting a loss of $0.04 per share.
Bringing the pain
Most of the pain for Motorola still comes from its Mobile Devices unit. The division posted net sales of $1.8 billion, down 45 percent compared to the year-ago quarter. During the quarter, Motorola shipped 14.7 million handsets and estimates its share of the global handset market at 6 percent.
Executives at the company say, however, that cost-cutting measures for the unit are now starting to have an effect. The business' operating loss for the first quarter was $509 million, compared to an operating loss of $418 million in the year-ago quarter. However, Moto did trim its operating loss from the $595 million it posted in the previous quarter.
"We significantly reduced the operating loss in mobile devices compared with the fourth quarter of 2008 and have increased the 2009 annual cost-reduction target to more than $1.3 billion," says Motorola handset head and co-CEO Sanjay Jha.
Jha also highlighted Motorola's planned move to the Android platform in the coming months. "We remain on track to having Android-based devices in store for the fourth-quarter holiday season," he reiterated.
The move to Android may also help to expand Motorola's portfolio outside of the American markets, where it is currently strongest. "We are in detailed discussions with multiple carriers around the world about a few of our Android smartphones that we intend to launch," Jha says.
Meanwhile, Motorola's Enterprise Mobility Solutions sales were $1.6 billion, down 11 percent compared to the year-ago quarter. Operating earnings were $156 million, compared to $250 million in the year-ago quarter.
"This represents the low point for enterprise sales," noted co-CEO Greg Brown on this morning's earnings call. The public safety side of the business is holding up, however, and could see some additional monies because of the U.S. government's stimulus spending plans.
"There’s a possibility in Q3 and Q4 that stimulus money will start to flow through," Brown said.
Motorola's Home and Networks Mobility division sales were $2 billion, down 16 percent compared to the year-ago quarter. Operating earnings were $115 million, compared to operating earnings of $153 million in the year-ago quarter.
Networks were down on lower GSM sales in Europe, Brown said. The company is also expecting that WiMax spending will be lower.
"We now expect WiMax sales in 2009 to be $500 million to $600 million," Brown said.
— Dan Jones, Site Editor, Unstrung