Motorola Mobility sees profit in post-split debut
The new consumer-focused company generated a profit in the fourth quarter and its smartphone shipments jumped, but it sees a loss coming for the current quarter.
In its first earnings release since Motorola Inc. split, Motorola Mobility has posted a profit.
The new consumer-focused company reported today that it generated $3.4 billion during the fourth quarter of 2010, representing a sizable 21 percent gain over its fourth-quarter 2009 revenue. It took in a profit of $80 million, another big gain over the year-ago period, when it lost $204 million.
Motorola Mobility's performance was about in line with analyst expectations of $3.4 billion in revenue.
However, Motorola Mobility's full-year performance ended up in the red. The company was able to generate $11.5 billion on the year, up 4 percent from 2009, but it lost about $86 million in 2010. However, considering the company lost $1.34 billion last year, its past-year performance was a sizable improvement.
Motorola's decision to split in two wasin 2008, and the breakup at the start of this month. Motorola Mobility is more geared toward consumers, featuring the company's mobile devices and home-focused products, like DVRs. It trades on the New York Stock Exchange under the ticker "MMI." The other post-breakup company, Motorola Solutions, which trades as "MSI," focuses mainly on enterprise and network products.
According to Motorola Mobility, its Mobile Devices division generated $2.4 billion of the company's revenue during the fourth quarter and posted a $72 million operating profit. During the fourth quarter of 2009, the division had an operating loss of $166 million. Overall, Mobile Devices tallied $7.8 billion in revenue during 2010, up 9 percent from 2009. The division saw an operating loss of $76 million in 2010, which is a significant improvement over the $1.2 billion it lost the year prior.
Motorola Mobility said that it shipped 4.9 million smartphones in the fourth quarter and 13.7 million smartphones in 2010. In the fourth quarter of 2009, it shipped 2 million smartphones. All told, Motorola shipped 11.3 million handsets in the fourth quarter and 37.3 million handsets in 2010.
Motorola's Home segment generated $1 billion in revenue during the fourth quarter, jumping just 1 percent year over year. Its operating earnings were $54 million on the quarter, besting the $30 million operating loss it tallied in the fourth quarter of 2009. Revenue for the company's Home business was down to $3.6 billion in 2010 from the $3.9 billion it generated in 2009. However, the division saw its operating earnings increase to $152 million in 2010 from the $11 million operating profit it enjoyed in the prior year.
Looking ahead, Motorola Mobility isn't expecting results to be as strong, at least to start.
The company said in today's earnings release that it expects to post a net loss of $26 million to $62 million in the first quarter of 2011.
Even so, Motorola Mobility CEO Sanjay Jha says he believes Motorola Mobility could have a better 2011 than 2010.
"With the global opportunities ahead, along with our diversified portfolio, our brand, and our people," Jha said in a statement accompanying his company's earnings, "we are well positioned to grow, and further improve our financial results in 2011."
As of this writing, Motorola Mobility shares are down nearly 5 percent in after-hours trading.