Heavy competition hits Motorola's bottom line
Slumping phone sales
Weak handset sales hit Motorola's results in the first quarter, as the mobile manufacturer revealed a loss for the three-month period.
The world's second biggest mobile phone manufacturer just managed to hit analysts' expectations with a loss of $181 million, or $0.08 a share, as increased competition in the market hit home. Excluding one-time items such as acquisitions costs, this translated into $0.02 a share, just meeting analysts' expectations.
In March, Motorola chiefs revised their forecasts and predicted the quarterly loss, forecasting sales in the range of $9.2bn to $9.3bn, down from previous expectations of $10.4bn to $10.6bn.
Motorola's mobile devices division saw a year-on-year slump of 15 percent, achieving revenue of $5.4bn, with the unit posting an operating loss of $231m.
The US-based phone maker shipped just 45.4 million handsets during the quarter, a significant decrease from 65.7 million in the fourth quarter.
Despite the poor quarterly performance the company remained confident that it would post a profit for the full year, and predicted a profit in the second quarter of $0.02 to $0.03 a share, excluding one-off items. This clashes with analysts' expectations of $0.08 per share for the coming quarter. However, the company is counting on a stronger second half.
Motorola is also due to continue its cost-cutting measures, which have already hit its Irish workforce in Cork. In March, the company announced it was slashing 330 positions from its Munster workforce as part of a global plan.
Copyright © 2007, ENN
Sponsored: Fast data protection ROI?