Motorola reported sales of $9.4 billion for Q1 2007 and a net loss of $181 million, or $0.08 per share.
“As I said a few weeks ago, the performance in our Mobile Devices business in the first quarter is unacceptable and we are committed to restoring it to an appropriate level of profitability. However, I am pleased with the continued performance of our Networks and Enterprise and Connected Home Solutions businesses. Despite challenges, the company was profitable for the quarter, excluding the items highlighted above. We also continue to invest for the future, as evidenced by the completion of several strategic acquisitions during the quarter,” said Ed Zander, chairman and CEO.
Some highlights:
- Mobile Devices segment sales were $5.4 billion, down 15 percent compared with the year-ago quarter. Excluding highlighted items, the segment incurred an operating loss of $231 million, compared with operating earnings of $701 million in the year-ago quarter. Lower sales and earnings are attributable to lower overall unit volumes, particularly in the emerging markets and Europe. Motorola’s share of the global handset market for the quarter is estimated to be 17.5%.
During the quarter, Mobile Devices shipped 45.4 million handsets.
Motorola said it is streamlining its mobile product portfolio, as evidenced by the discontinuation of six legacy products during the quarter. It will continue to carry out previously announced workforce reductions and introduce more devices based on Linux/Java.
- Networks and Enterprise segment sales were $3.0 billion, up 20 percent compared with the year-ago quarter. Excluding highlighted items, operating earnings were $343 million, compared with operating earnings of $328 million in the year-ago quarter. Operating margin, excluding highlighted items, was 11.4 percent compared to 13.0 percent in the year-ago quarter.
- Connected Home Solutions segment sales were $1.0 billion, up 42 percent compared with the year-ago quarter. Excluding highlighted items, operating earnings were $113 million, compared with operating earnings of $47 million in the year-ago quarter. Operating margin, excluding highlighted items, was 10.9 percent compared to 6.4 percent in the year-ago quarter.
Motorola said its Q2 outlook for sales is essentially flat with first quarter 2007. The outlook for earnings per share in the second quarter is in the range of $.02 to $.03. This outlook excludes any reorganization of business charges associated with the company’s operating expense reduction initiatives, as well as any other items of the variety highlighted by the company in its quarterly earnings releases.
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