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Motorola Mobility Disappoints with Q1 Guidance

By Andrew Berg | January 27, 2011

It was a mixed bag for Motorola Mobility Holdings last night, as the company held its first earnings call since it became an entity separate from Motorola Solutions on Jan. 4.

While the company shipped 4.9 million smartphones in the quarter, up from 2 million in the year-ago quarter, guidance for the first quarter of 2011 was disappointing on various levels, due at least in part to the iPhone launching with Verizon Wireless.

In all, Motorola Mobility launched seven new smartphones globally in the fourth quarter and 23 total smartphones for the year. CEO Sanjay Jha said the company anticipates shipping 20 million to 23 million units in the coming year.

The company posted $80 million in net income, or 27 cents per share, in the fourth quarter. That’s up from a $208 million loss in the year-ago quarter. Total revenue hit $3.43 billion, up from $2.82 billion a year ago.

Still, the company is projecting a loss of 9 to 21 cents per share in the first quarter, which disappointed analysts who had the company pegged for a profit of 1 cent per share.

In a Q&A after the quarterly conference call, Jha admitted that the company is already seeing the iPhone effect at Verizon. “We have seen a little slowdown in our sell-through of our devices, because there’s clearly an anticipation of some other devices coming to Verizon,” Jha said, later clarifying that it was indeed the iPhone that was hindering sales at Verizon right now.

Still, Jha was confident that more “door-swings” at Verizon retail shops will keep consumers looking at high-end Motorola smartphones that offer the potential for the carrier to upsell to LTE devices like the forthcoming Droid Bionic.

Motorola had anticipated an acceleration of mid-range smartphone adoption with the advent of tiered data pricing in the United States, which Jha said was not the case.

“Consumers continued to buy high-tiered smartphones like Droid X,” he said, adding that the market in the United States is unique in its preference for premium devices. Jha said China and Latin America have been the biggest adopters of Motorola’s mid-range smartphones over the past year.

The company is hoping to diversify its product line with a number of converged solutions in the coming months. Notably, Motorola Mobility will launch the Atrix, a unique smartphone that can dock with and power a laptop or desktop computer, with AT&T in the first quarter. It will also launch a 10-inch tablet, the Motorola Xoom. Both devices were unveiled at the annual Consumer Electronics Show in Las Vegas.

Shares of Motorola Mobility were down over 7 percent, or $2.73 to $32.10 in early morning trading.


Filed Under: Devices

 

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