Motorola reports big losses, promises profitability turnaround

Obviously affected by a slowdown in customer spending, Motorola posted its fourth consecutive quarterly loss. However, despite forecasting two more quarters of losses, the company said it would return to profitability in the second half of the year and be profitable for the full year.

Motorola’s operating loss for the fourth quarter was $90 million, or 4 cents per share. This was within analysts’ estimates, which had ranged between 4 and 6 cents. Last year, the company reported a profit of $362 million, or 16 cents per share.

Sales from ongoing operations in the fourth quarter dropped 25% to $7.3 billion from $9.8 billion in the same quarter last year. The net loss in the quarter was $1.2 billion, or a loss of 55 cents per share. This is compared with a net profit during the same quarter last year of $135 million, or 6 cents per share.

Motorola’s personal communications segment saw sales plunge 14% from last year to $3 billion.

“We are a long way from declaring success, and we have much more to do,” said Mike Zafirovski, executive vice president of Motorola’s PCS sector. “But we have improved our results.”

Zafirovski said during the company’s conference call that handset shipments increased 17.5%. Specifically, GSM-handset shipments increased 16%, TDMA shipments were up 32%, iDEN shipments increased 11% and CDMA shipments were down 2% because of a decline in low-end sales, he said.

The wireless infrastructure division experienced a 33% drop in sales, to $1.38 billion, compared to the previous year.