Second quarter results at Motorola were an improvement on previous quarters thanks to cost cutting exercises and small one time gains. However, revenues still fell at Motorola by more than a third, as device shipments nearly halved from 28 million a year ago to just 14.8 million.
Mobile devices segment sales were $1.8 billion, down 45% compared to the same quarter last year. The generally accepted accounting principle (GAAP) operating loss was $253 million, compared to an operating loss of $346 million in the same period 2008. The segment reduced its operating loss by 50% sequentially from $509 million in the first quarter of 2009.
Motorola has an estimated global handset market share of 5.5%, it claimed. It has made continued progress on differentiated smartphone devices, which are targeted to launch in the fourth quarter of 2009.
Motorola reported sales of $5.5 billion in the second quarter of 2009. The earnings from continuing operations in the second quarter of 2009 were $26 million, or $0.01 per share. The earnings from continuing operations includes net income of $0.02 per share from highlighted items, which are outlined in the table at the end of the press release.
Total cash at the end of the second quarter was $6.5 billion, an increase of $360 million compared to the end of the first quarter. The Company generated $150 million of positive operating cash flow during the quarter and expects to continue to generate positive cash flow in the second half of the year.
Greg Brown, co-CEO of Motorola and CEO at Broadband Mobility Solutions, said: “In broadband mobility solutions, we continued to lead in our key markets and delivered solid results in a very challenging economic environment. We further reduced our cost structure, improved our operating margins and decreased inventory on a sequential basis. We also continued to focus our R&D efforts on innovation in areas such as next generation public safety, enterprise mobile computing, enhanced broadband video and 4G wireless.”
Sanjay Jha, co-CEO at Motorola and CEO at Mobile Devices, added: “We have agreements in place with carriers and remain on track to bring our new smartphone devices to market for the holiday selling season. We are also excited about our 2010 portfolio and are pleased with the customer feedback. In Mobile Devices, we improved the operating loss, reflecting a lower cost structure, and substantially reduced cash consumption as compared to the first quarter.”
Motorola’s home and networks mobility segment sales were $2.0 billion, down 27%compared to the same quarter last year. GAAP operating earnings were $153 million, compared to operating earnings of $245 million in the quarter last year.
Enterprise Mobility Solutions segment sales were $1.7 billion, down 17% compared to the same quarter last year. GAAP operating earnings were $227 million, compared to operating earnings of $377 million in the year-ago quarter.
The Company’s outlook for third quarter earnings from continuing operations is $(0.01) to $0.01 per share. This outlook excludes charges associated with the Company’s operating expense reduction initiatives, as well as any other items of the variety typically highlighted by the Company in its quarterly earnings releases.