Motorola Outlook Upgrades by Debt Agency

The debt ratings agency, Standard & Poor's has affirmed it's 'BBB+' corporate credit rating and other ratings on Motorola. The outlook is revised to positive, from stable reflecting generally improving profitability trends, benefiting from the company's refreshed cell phone product line.

"The ratings continue to reflect the company's good positions in that market and other related industries, strong balance sheet and good cash-flow-generating capacity," said Standard & Poor's credit analyst Bruce Hyman. These are somewhat offset by its moderate degree of business diversity, the challenges of rapid technology evolution, and aggressive market conditions.

Motorola's December-quarter sales rose 18% from the year-earlier level, driven by improving cell-phone revenues--fourth-quarter phone sales were up 30% in the period, reflecting a three-point gain in market share (18% for full-year 2005, compared with 15% for 2004).

Longer-term cell-phone financial performance will depend on continual introduction of new competitive models and continued cost reduction in an environment of rapid technology change, fluctuating market shares, and uncertain carrier and consumer preferences. The unit has about one-half of Nokia's market share, and S&P says that it expect competitive pressures to remain intense as major suppliers seek leadership in the fastest-growing markets."

Posted to the site on 20th March 2006