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Motorola’s Stock Drop on Sharp Fourth-Quarter Declines

By Mike Caggeso
Associate Editor

Shares of the United State’s largest mobile-phone maker, Motorola, Inc. (MOT) dropped $2.31 [18.75%] to $10.01 in trading yesterday (Wednesday) after the company announced fourth-quarter profit was down 84% from sales declines of its phones and handsets.

Also in the final three months, sales for the Schaumburg, Ill.-based company dropped 18.2% to $9.65 billion, down from $11.79 billion. Net income was a paltry $100 million [4 cents per share] down from $623 million [25 cents per share] in the same period last year.

"We are focused on aggressively rationalizing the company’s cost structure and working to get Mobile Devices back on track,x300hjcb " Greg Brown, president and chief executive officer of Motorola, said in a statement. "The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done.”

The company is forecasting a first-quarter loss from continuing operations of 5 cents to 7 cents per share as it reorganizes and cuts expenses.

MarketWatch reported that it could take all of 2008 or longer for the company to recover from these losses, as new phones take years to develop, test and market on top of the company’s high costs.

In the past year, the company slipped to third place in global market share, down from 20.7% to 13.1% – behind Finland-based industry leader Nokia Corp. (NOK) [38.1% market share] and Korea-based Samsung Electronics Co., Ltd. [14.5% market share].

Greg Brown took over as CEO on Jan. 1 after former CEO Ed Zander retired amid falling profits and declining sales.

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Read more on Motorola at Wikinvest
January 24th, 2008

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