Motorola chalks up biggest ever loss, but returns to profit
It's the way you tell them...
Motorola Inc yesterday said its loss for the second quarter was $2.3bn, its largest ever, after recording a restructuring charge of $2.4bn. The company said that sales were down, but added that without the one-off charge, it actually returned to profitability.
For the three months to June 30, the company saw a net loss of $2.3bn, compared to a loss of $759m a year ago, on revenue that was down 11% at $6.7bn. Excluding the restructuring charge, the company reported net income of $48m, better than estimates.
On June 27, the company said it would record a $3.4bn charge (reduced to $2.4bn after tax) in order to lay off 7,000 staff and write down assets to take the company "back to about its 1995 size, before the era of the excesses of the dot-com and telecom booms."
Despite the wow-factor of the GAAP net loss, the second quarter numbers pleased observers, who had not expected a return to profitability excluding items until the third quarter. The Thomson First Call analysts' consensus estimate was for a loss of $0.04 per share, but Motorola reported a profit of $0.02 per share.
Motorola president and COO Edward Breen said: "Not only have we announced the actions that will substantially complete the company's restructuring program but, excluding the impact of special items, we returned to profitability one quarter earlier than previously expected."