Hold off on the eulogy for Motorola

July 31, 2008

moto.jpgWhat in the world has gotten into Motorola? For more than a year, Wall Street has lamented its fate. Just this week, industry forecasters predicted the handset maker would have nothing to show for the second quarter other than a hefty net loss and a drop to fourth place in the global phone market after losing share to LG Electronics.

So imagine the surprise when Motorola emerged with a small profit, sold nearly 2 million more phones than analysts had expected, and held on to its No. 3 ranking? Company shares jumped 13 percent as it also outlined an expected profit from continuing operations for the full year.

Motorola executives lost no momentum in describing ambitious plans to analysts either, saying they expected to launch 50 new devices this year, many more of them equipped for high-speed wireless networks. They are also looking more closely at the best ways to split the company, with a final separation due in the third quarter next year.

Investors will wonder whether this feisty show means Motorola is back in the game after failing to show the market any cool new phones for many quarters since the Razr was last a status symbol.

“It still has a mountain to climb,” CCS Insight analyst Geoff Blaber said.


Keep an eye on:

* Nokia cut prices of many of its phones by as much as 10 percent in late July, according to industry sources. (Reuters)

* CBS cuts full-year profit forecast, plans to sell 50 radio stations. (Reuters)

* Sports agency IMG strikes exclusive 20-year deal with China’s national broadcaster. (WSJ)

* Google mulls venture capital arm (WSJ)

(Photo of model performing at the Motorola Fashion Rock Night Show at a Berlin club/Reuters)

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