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Motorola still on the schnide

Handset sales drop 45%

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Motorola is still losing money like gangbusters. In the first quarter of 2009, handset sales dropped nearly 50 per cent compared to last year.

The company said it sold 14.7 million mobiles in the three month period ending March 31, spiraling down from 27.4 million year-over-year.

Moto's total net loss in Q1 was $231m, a deepening hole from $194m it lost in the first quarter of 2008. That's on revenue of $5.37bn, compared to $7.45bn year-over-year.

The cause of Moto's woes, as usual, was its ailing handset business. Mobile sales totaled $1.8bn, down by 45 per cent year-over-year. The unit posted an operating loss of $509m in Q2 compared to a loss of $418m during the same period last year.

Moto hopes an upcoming batch of Android-based phones will save its handset biz, but the rescue — if it comes — won't arrive for some time yet. Moto's handset chieftain and co-CEO Sanjay Jha reconfirmed in a prepared statement that the phones won't be out until the forth quarter of this year. Jha's scrap of good news was that the cell phone division's first quarter operating loss was less than the previous quarter.

Perhaps more worrying for the firm is that its two other divisions that have traditionally kept the company afloat - home networking and providing infrastructure to network operators - are also taking on water.

Home and Network Mobility sales were $2bn, down 16 per cent compared to the same period last year. The unit's GAAP operating earnings was $115m, compared to $153m year-over-year.

Enterprise Mobility sales were $1.6bn, down 11 per cent compared to Q1 2008. GAAP operating income was $156m, down from $250m year-over-year.

Moto has been trying to ride out the crap economy by laying off staff and making money-saving cuts. The company said it expects to generate positive cash flows in the second half of the year. ®

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