Motorola Reports a Small Profit, Held Back by Phone Sales

From PC World: Motorola's fourth-quarter sales fell 20 percent year-on-year, but the company still made out a small profit, unhampered by the exceptional charges that plunged it into loss a year ago, it reported Thursday. It expects to make a loss in the first quarter, however.

The company may be regretting its decision to hold on to its mobile devices business segment, which it had previously planned to sell: Device shipments fell 38 percent, and it was the only one of Motorola's major business segments to make an operating loss for the quarter, albeit a smaller one than a year earlier as the company's cost-cutting measures take effect. The decline in shipments will continue this year as the company expands its smartphone range and reduces investment in midrange feature phones, said Motorola Co-CEO Sanjay Jha, who is also CEO of the mobile devices business segment.

Total sales for the quarter slipped to US$5.7 billion from $7.1 billion a year earlier. The company reported net income of $142 million, or $0.06 per share, disappointing analysts who had expected $0.08 per share. A year earlier, the company reported a $3.7 billion net loss, including $1.8 billion in goodwill impairment and other charges, and $2.2 billion in deferred income tax.

For the full year, Motorola reported a net loss of $51 million on sales of $22 billion, down 27 percent from the $30 billion in sales it reported for 2008.

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