Motorola's fourth-quarter loss hits $3.6 billion
Trouble in the company's Mobile Devices segment was a significant factor in the loss. Overall revenue of $7.1 billion was down 26 percent year over year.
Updated at 4:55 a.m. PST with more details from the earnings announcement. Updated again at 7:07 a.m. PST with stock market reaction.
Motorola on Tuesday reported a stunning net loss on tumbling revenue for the fourth quarter.
The net loss for the phone maker in the quarter, which ended December 31, was $3.6 billion, or $1.57 per share, compared with positive earnings of $100 million (4 cents per share) for the same period a year earlier.
All but one penny of the per-share loss stemmed from net charges related to the impairment of goodwill and an increase in deferred tax asset valuation reserves.
The loss had been widely expected after Motorola in January announcedand said revenue would come in below analysts' expectations, on weaker-than-expected handset sales.
Revenue for the fourth quarter was $7.1 billion, down 26 percent from $9.6 billion year over year.
The news sent Motorola's shares tumbling in early trading Tuesday, down approximately 10 percent to just over $4 a share, from Monday's closing price of $4.54.
Motorola stressed Tuesday that it is doing everything it can to keep costs under control amid a faltering economy. Co-CEOs Greg Brown and Sanjay Jha said in a statement:
In light of the economic climate and challenges we face, we have implemented aggressive measures to reduce costs and improve financial flexibility, particularly in Mobile Devices. The cost-reduction actions underway are expected to generate aggregate savings of approximately $1.5 billion in 2009.
In January, Motorola said it would lay off about 4,000 workers, on top of the 3,000 job cuts announced in October in a broad restructuring.
Trouble on the cell phone front was a significant factor in the fourth-quarter loss. Sales in the company's Mobile Devices segment were $2.35 billion, down 51 percent from the fourth quarter of 2007. Motorola said that during the quarter just ended, it shipped 19.2 million handsets and estimated that its share of the global handset market was 6.5 percent. That compares with 25.4 million handsets in the third quarter and 40.9 million in the fourth quarter of 2007.
Motorola said it is on target to launch next-generation devices during the fourth quarter of 2009. In October, the company simplified its development efforts, ditching Symbian and other mobile operating systems, to.
Also in the fourth quarter of 2008, Motorola said Tuesday, sales in the Home and Networks Mobility segment were $2.6 billion, down 5 percent compared with the year-ago quarter. Enterprise Mobility Solutions segment sales were $2.2 billion, up 4 percent compared with the year-ago quarter.
For the full year, Motorola reported a net loss of $4.1 billion on revenue of $30 billion.
The outlook for the first quarter of 2009 won't likely offer any reassurances to investors. Motorola foresees a loss of 10 cents to 12 cents per share, excluding charges.
The company also said it is suspending its cash dividend, effective immediately.