Thursday, October 29, 2009
Motorola, Profit No Longer Mutually Exclusive
Motorola’s ambitious turnaround strategy is beginning to pay off. Posting earnings this morning, the company said it managed a surprise profit in the third quarter, despite a decline in revenue. For the period, the troubled handset maker reported a profit of $12 million, or a penny a share, compared with a year-earlier loss of $397 million, or 18 cents a share. Sales fell 28 percent to $5.45 billion from $7.48 billion. Not the prettiest of quarters, but that penny-a-share profit beat the consensus estimates of analysts, who had expected the company to simply break even.
Motorola has finally announced its bet-the-company Android handset. At GigaOM’s Mobilize 09 event in San Francisco this morning, Sanjay Jha, Motorola’s co-CEO and CEO of the company’s handset division, uncrated the CLIQ, a device it describes unremarkably as the “first phone with social skills.”
Looks like Motorola is poised to make good on co-CEO Sanjay Jha’s promise to bring some Android devices to market by the holidays. The company just distributed invitations to an Android-related event in San Francisco.
Looking over Motorola’s latest earnings, it’s hard to imagine that the company once claimed more than a fifth of global handset sales. Reporting a surprise second-quarter profit of a single cent per share this morning, Motorola said it shipped 14.8 million phones last quarter–down nearly 50 percent year-over-year.
Motorola Co-chief Executive Sanjay Jha says the company is “completely committed to making [its] handset business work.” The question is: CAN the handset business be made to work? Judging from the company’s latest earnings, the answer would appear to be a categorical “no.”
Well this should do wonders for Motorola employee morale…. The handset maker this morning said it will cut compensation and benefits packages for its employees in order to “better align with industry norms”–industry norms in Motorola’s case being the ongoing collapse of its post-Razr phone business.
After market close Thursday, Motorola posted a loss of $397 million, or 18 cents a share, and said it will sack 3,000 employees this quarter and next as it cuts costs, reorganizes its mobile devices business and generally tries to reverse its continued descent into the maelstrom.
When Motorola CEO Greg Brown told investors last Thursday that the company was making progress in hiring a CEO for its mobile division, he wasn’t kidding. This morning the company named former Qualcomm COO Sanjay Jha to the position.
