Motorola continues handset momentum

Motorola continued its rapid climb up the global handset ladder, announcing today it had shipped a record 46.1 million in the first quarter. But despite the market share gains in its biggest division, it saw its Q1 profits dip and its networks division take a hit.

Motorola's handset shipments in the first three months of 2006 jumped 61% in one year and increased 3% over the 44.7 million units shipped in the fourth quarter. Its total Q1 revenues jumped 23% to $10.01 billion year-over-year, but costs ascribed to stock option expenses sent profits down from $692 million in Q4 of 2005 to $686 million.

Its handset division took in $6.4 billion in revenues, up 45% from a year ago, and recorded operating earnings of $440 million. As it did last quarter, Motorola credited much of its success to its RAZR line of phones, which Motorola officials said had topped the 60 million shipment mark. According to Motorola, its global handset market share jumped 2 percentage points to 21%, bringing it closer to Nokia's dominant and still distant lead of 33%.

Its networks division, however, posted Q1 revenues of $1.43 billion, down 14% year-over-year. Motorola blamed the shortfall on restructuring costs of $21 million as well as decreasing sales. Its growing Connected Homes Solutions Segment, however, saw a boost of 7% to $710 million over the same period as Motorola continues to rollout its video and set-top boxes and network equipment for Verizon Communications' fiber-to-the-premises network.