Communication equipment maker Motorola Inc. (MOT), Thursday reported a profit for the fourth quarter of fiscal year 2009 from a loss last year, helped by lower charges and operating expenses, as well as cost saving measures. Looking ahead, Motorola, however, expects to report a loss for the first quarter of fiscal year 2010. Motorola shares are currently trading down nearly 10% on the NYSE, following the news.
Motorola's fourth-quarter net earnings attributable to the company were $142 million or $0.06 per share, compared to a loss of $3.66 billion or $1.61 per share last year.
Results for the quarter included net charges of $0.03 per share from various items and non-cash expenses of $0.04 per share for amortization of intangibles and stock-based compensation.
Motorola's fourth-quarter net sales declined to $5.72 billion from $7.14 billion in the prior-year quarter.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share on revenues of $5.94 billion for the quarter. Analysts' estimates typically exclude special items.
For the preceding third quarter, Motorola's net earnings attributable to the company were $12 million or $0.01 per share on sales of $5.45 billion.
During the fourth quarter, the company incurred other charges of $106 million, which is less than the $1.71 billion recorded in the prior-year quarter. The company also witnessed significant reductions in its selling, general and administrative expenses and research and development expenditures.
Business segment-wise, Mobile Devices sales were $1.82 billion, down 22% from $2.35 billion in the year-ago quarter. The company said it shipped 2 million smartphones to customers globally in more than 20 countries. In total, the company shipped 12 million handsets.
Enterprise Mobility Solutions segment sales declined 12% in the fourth quarter to $1.95 billion from $2.22 billion a year earlier. Home & Networks Mobility segment sales were $1.96 billion, down 24% from $2.6 billion in the prior-year quarter.
For fiscal 2009, Motorola reported net loss attributable to the company of $51 million or $0.02 per share, compared with a loss of $4.24 billion or $1.87 per share, a year ago.
GAAP loss from continuing operations was $88 million or $0.05 per share, which included net charges of $0.07 per share from special items. This compares to a GAAP loss from continuing operations of $4.24 billion or $1.87 per share in fiscal 2008, which included net charges of $1.89 per share.
The company's full-year sales were $22.04 billion, down from $30.15 billion in the previous year.
Wall Street analysts projected a profit of $0.02 per share for fiscal 2009 on sales of $22.25 billion.
The company said it completed cost-reduction actions that generated more than $1.9 billion in cost savings for full-year 2009, with $1.5 billion in cost savings from Mobile Devices.
Among others in the industry, Nokia Corp. (NOK) today reported higher profit for the fourth quarter of fiscal 2009, helped by volume growth that was better than the mobile device industry and lower costs. The company's fourth-quarter profit attributable to equity holders of the parent, on a reported basis, was EUR 948 million, compared to a profit of EUR 576 million in the year-ago quarter. Earnings per share rose to EUR 0.26 from EUR 0.15 last year. Nokia's net sales declined 5% to EUR 11.99 billion from EUR 12.66 billion in the prior-year quarter.
Another peer, Swedish telecommunications equipment maker LM Ericsson Telephone Co. (ERIC) reported an 82% slide in profit for the fourth quarter, hurt mainly by a decline in sales amid reduced operator spending in a number of markets. The company's net income plunged to SEK 0.7 billion from SEK 4.1 billion in the previous year. Earnings, on a per share basis, dropped 92% to SEK 0.10 from SEK 1.21 in the prior-year quarter. Net sales were SEK 58.3 billion, down from SEK 67 billion a year earlier.
Looking ahead, Motorola expects first-quarter loss per share in the range of $0.01 - $0.03. The outlook includes expenses related to non-cash amortization of intangibles and stock-based compensation expense of approximately $0.04 per share and excludes charges associated with various items. Analysts currently expect the company to report earnings of $0.03 per share for the quarter.
While commenting on the results, Sanjay Jha, Motorola co-chief executive officer and chief executive officer of Mobile Devices, stated, "Our first Android smartphone devices have been very well received. We look forward to broadening our handset portfolio in 2010 with the launch of at least 20 smartphone devices around the world and continued evolution of our MOTOBLUR service."
MOT is trading at $6.60, down $0.80, on a volume of 79.32 million shares.
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