Although the handset maker posted a small quarterly profit after selling more mobile phones than projected, industry watchers say Motorola has a long way to go to turn around the beleaguered company. With its Q2 earnings, Motorola was able to cling on to its No. 3 market share ranking behind Nokia and Samsung, barely holding off challenger LG Electronics.
Motorola said it shipped 28.1 million phones in Q2. Q2 profit was $4 million, leading to a break-even on a per-share basis, compared with a loss of $28 million in the year-ago quarter.
Specifically, Motorola’s mobile devices business was the only division to post a loss. In fact, it posted a wider operating loss of $346 million compared with an operating loss of $332 million a year ago on revenue that fell 22% to $3.3 billion.
Motorola’s television set-top box and networks equipment division posted operating earnings of $245 million, up 28% from a year ago, on sales of $2.7 billion, which were up 7% from a year earlier. The enterprise mobility unit saw sales rise 6% to $2 billion from the year-ago quarter.
The company has been doggedly trying to recover from recent downturns and setbacks, while also watching its shares plummet more than 70% since October 2006. In March, it announced plans to spin off its mobile device business in 2009, but hasn’t found any takers.
Earlier this week, Motorola unveiled plans to divide its home and networks mobility unit into three distinct businesses – cable set-top boxes, cellular networks and broadband access solutions business. Some analysts have suggested that this reorg would actually make it easier for the Schaumburg, Ill., company to spin those divisions off rather than the handset business.
Editor’s Note: Watch for Monica Alleven’s Aug. 1 detailing what happened to Motorola in the print edition and at www.wirelessweek.com.