Motorola Reports Disappointing Q3 Sales
Motorola reported sales, on a continuing operations basis, of US$10.6 billion in the third quarter of 2006, lower than expected by city analysts, which had averaged around the US$11.1 billion mark. Net profit fell by 45% from the year-ago quarter, but last year's results included large one-time gains. Operating earnings slid to US$968 million from US$1.08 billion.
"While our third-quarter sales were slightly below our guidance, we are pleased with our earnings. Each of our business segments and total Motorola improved operating margin versus the second quarter of 2006, excluding highlighted items. Mobile Devices again achieved record unit shipments and sequentially improved its market share versus the second quarter," said Ed Zander, chairman and CEO.
"During the quarter, GSM infrastructure sales in the Europe, Middle East and Africa region were weaker than anticipated due to customer delays in capital spending. Additionally, sales of iDEN mobile devices were lower, caused by customer inventory reductions in anticipation of new dual-mode device shipments in the fourth quarter. With our strong balance sheet, leadership technologies and proven record of growth, Motorola is well positioned to continue creating value for its shareholders as one of the world's leading technology companies."
Mobile Devices Segment sales were US$7.03 billion, up 26 percent compared with the year-ago quarter. Operating earnings increased to US$819 million, including a charge of US$16 million for acquisition-related in-process research and development, compared with operating earnings of US$593 million in the year-ago quarter. During the quarter, Mobile Devices shipped 53.7 million units, up 39% compared to the third quarter of 2005 -- and up 3.6% compared to 51.9 million handsets shipped during the second quarter of 2006.
Networks and Enterprise Segment sales were US$2.78 billion, up slightly compared with the year-ago quarter. Operating earnings were US$378 million, including net reorganization of business charges of US$51 million, compared to prior-year operating earnings of US$465 million.
The company says that its outlook for the fourth quarter of 2006 is for sales of between $11.8 billion and $12.1 billion, an increase of 18 to 21 percent versus the prior-year quarter."
Posted to the site on 19th October 2006
