Motorola Quarterly Profits Plunge
Motorola reported a sharp drop in fourth quarter profits, to US$528 million - down from the US$1.177 billion in the same quarter a year earlier. Sales came in at $11.8 billion. During the quarter, the company generated operating cash flow of approximately US$700 million, its 24th consecutive quarter of positive operating cash flow.
The company also announced plans to cut 3,500 jobs and save US$400 million, aiming to return its operating margin to a double-digit percentage level in the second half of 2007.
"As I said earlier this month, we are disappointed with our fourth quarter operating earnings performance. However, the company generated strong revenue growth and met or exceeded our goals in many areas during the quarter. I am confident that we remain well positioned for continued growth and success," said Ed Zander, chairman and CEO.
"Looking at the full year, I am pleased with our progress. Our business remains solid, and we will continue to execute on our focused, strategic plan to create value for our shareholders. We remain committed to increasing our profitability, while delivering compelling new products and solutions to our customers in 2007," Zander added.
Mobile Devices segment sales were $7.8 billion, up 19 percent compared with the year-ago quarter. Operating earnings were down at US$341 million, compared with operating earnings of US$663 million in the year-ago quarter. Operating earnings were below the company's internal forecast at the start of the fourth quarter due to an unfavorable geographical and product-tier mix. For full year 2006 compared to full year 2005, sales increased 32 percent and operating earnings increased 23 percent.
Networks & Enterprise segment sales were $3.0 billion, up 6 percent compared with the year-ago quarter. Operating earnings decreased to US$428 million, compared with operating earnings of US$542 million in the year-ago quarter. The fourth quarter of 2006 included net reorganization of business charges of US$48 million and a charge for a legal reserve of US$25 million."
Posted to the site on 22nd January 2007