Motorola posts second straight loss
Motorola Inc posted its second straight quarterly loss after customers defected to rivals, costing the company its title as the world's second-largest maker of mobile phones.
By Agencies |
NEW YORK: Motorola Inc posted its second straight quarterly loss after customers defected to rivals, costing the company its title as the world's second-largest maker of mobile phones.
The second-quarter net loss was $28 million, or 1 cent a share, compared with a profit of $1.38 billion, or 55 cents, a year earlier, the company said in a statement today. Sales fell 19 percent to $8.7 billion. Motorola first announced the loss last week, missing its forecasts for the third time this year.
Phone shipments slumped by about a third as Chief Executive Officer Ed Zander failed to introduce a device to compete with Apple Inc.'s iPhone, introduced June 29, and new BlackBerrys from Research In Motion Ltd.
Zander is ``under a certain amount of pressure,'' said Lucy MacDonald, who helps manage $100 billion as chief investment officer for global equities at RCM Ltd. in London. ``With Apple appearing on the scene as well, that just increases the number of attractive options.''
Third-quarter profit will probably be 2 cents a share or ``slightly'' higher, when excluding some costs, Motorola said. Analysts had estimated profit on that basis would be 5 cents. In the third quarter of last year, Motorola posted net income of $968 million, or 39 cents a share, on sales of $10.6 billion.
Shares of Schaumburg, Illinois-based Motorola rose 6 cents to $18 in New York Stock Exchange composite trading yesterday. They've dropped 12 percent this year.
Without some costs, profit was 2 cents, exceeding the 1-cent average estimate in a survey.
The second-quarter net loss was $28 million, or 1 cent a share, compared with a profit of $1.38 billion, or 55 cents, a year earlier, the company said in a statement today. Sales fell 19 percent to $8.7 billion. Motorola first announced the loss last week, missing its forecasts for the third time this year.
Phone shipments slumped by about a third as Chief Executive Officer Ed Zander failed to introduce a device to compete with Apple Inc.'s iPhone, introduced June 29, and new BlackBerrys from Research In Motion Ltd.
Zander is ``under a certain amount of pressure,'' said Lucy MacDonald, who helps manage $100 billion as chief investment officer for global equities at RCM Ltd. in London. ``With Apple appearing on the scene as well, that just increases the number of attractive options.''
Third-quarter profit will probably be 2 cents a share or ``slightly'' higher, when excluding some costs, Motorola said. Analysts had estimated profit on that basis would be 5 cents. In the third quarter of last year, Motorola posted net income of $968 million, or 39 cents a share, on sales of $10.6 billion.
Shares of Schaumburg, Illinois-based Motorola rose 6 cents to $18 in New York Stock Exchange composite trading yesterday. They've dropped 12 percent this year.
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Without some costs, profit was 2 cents, exceeding the 1-cent average estimate in a survey.
Competitors
Motorola sold 35.5 million mobile phones in the quarter, down from 51.9 million a year earlier. Samsung Electronics Co., based in Suwon, South Korea, shipped 37.4 million phones in its latest quarter, pushing Motorola into third place in global sales. Nokia Oyj sells the most.
The two have won customers in Europe and Asia, while the iPhone has lured U.S. users, who account for more than a third of Motorola's mobile-phone sales, according to Oppenheimer & Co analyst Lawrence Harris.
``Consumers will pay up for devices that they want,'' said Harris, a New York-based analyst who rates the shares ``neutral.'' ``The iPhone is right now the phone of the moment.''
The iPhone, priced at as much as $599, sold as much as 700,000 units in its debut weekend, according to New York-based Goldman Sachs Group Inc. analyst David Bailey, double his initial projections.
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Zander has yet to introduce a phone to match the success of the best-selling Razr, unveiled in 2004 and now going for $20 with a service contract, less than a 10th its original price. The company in May unveiled the Razr 2, which is sleeker than its predecessor, has an improved camera and more storage for songs. The company said the device will be available ``in several markets'' in July. The Rizr Z8, which Motorola call its ``media monster,'' started selling in Spain last month.
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