01—Abstract
Summary
Summary of the 10-K filed February 28, 2008. Cited figures are marked; the original filing is the authoritative source.
Motorola Inc.'s 2007 Form 10-K filing reveals a challenging year, primarily driven by a significant downturn in its Mobile Devices segment.
Net sales for the year decreased by 15% to $36.6 billiona, largely due to a 33% drop in Mobile Devices revenue, which resulted in an operating loss for that segment. The company experienced a consolidated operating loss of $553 million, a stark contrast to the $4.1 billion operating earnings in 2006. While the Home and Networks Mobility and Enterprise Mobility Solutions segments showed growth in net sales (9% and 43% respectively), this was insufficient to offset the substantial decline in the core mobile phone business.
Despite the overall financial struggles, Motorola made strategic moves, including significant acquisitions in the Home and Networks Mobility and Enterprise Mobility Solutions segments, notably the acquisition of Symbol Technologies. The company also continued its investment in research and development, though the effectiveness of these investments, particularly in the Mobile Devices segment, was called into question by declining market share. Looking ahead, Motorola announced it was evaluating strategic alternatives for its Mobile Devices business, including a potential separation, indicating a significant restructuring effort to address ongoing challenges and improve shareholder value.
02—Key points
Key Highlights
- Consolidated net sales declined 15% year-over-year to $36.6 billion.
- The Mobile Devices segment experienced a significant 33% decrease in net sales, contributing to an operating loss of $1.2 billion for the segment.
- The company reported a consolidated operating loss of $553 million for the year, a substantial decrease from $4.1 billion in operating earnings in the prior year.
- Enterprise Mobility Solutions segment saw strong growth with a 43% increase in net sales, largely driven by the acquisition of Symbol Technologies.
- Home and Networks Mobility segment sales grew 9%, supported by strong performance in digital entertainment devices.
- Motorola repurchased $3.0 billion of its common stock during 2007 as part of its ongoing share repurchase program.
- The company announced it is evaluating strategic alternatives for its Mobile Devices business, potentially including a separation.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2007, Motorola Solutions, Inc. lost $0.00.
- Revenue$36.62B100.0%
- Cost of revenue−$26.67B72.8%
- Gross profit$9.95B27.2%
- Operating costs−$10.51B28.7%
- Operating income−$553.0M1.5%
- Interest, other & tax$504.0M1.4%
- Net income−$49.0M0.1%
04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 28, 2008Financial Statements
| Revenue | $36.62B |
| Cost of Revenue | $26.67B |
| Gross Profit | $9.95B |
| R&D Expenses | $4.43B |
| SG&A Expenses | $5.09B |
| Operating Income | -$553.00M |
| Net Income | -$49.00M |
| EPS (Basic) | $-0.02 |
| EPS (Diluted) | $-0.02 |
| Shares Outstanding (Basic) | 2.31B |
| Shares Outstanding (Diluted) | 2.31B |
05—Questions
Frequently Asked Questions
What was the primary driver of Motorola's financial performance in 2007?
The primary driver of Motorola's financial performance in 2007 was the significant underperformance of its Mobile Devices segment. This segment saw a substantial decrease in net sales and incurred an operating loss, heavily impacting the company's overall financial results.
Which segments of Motorola performed well in 2007?
The Home and Networks Mobility segment and the Enterprise Mobility Solutions segment demonstrated positive performance. The Home and Networks Mobility segment saw a 9% increase in net sales, while the Enterprise Mobility Solutions segment experienced a strong 43% increase in net sales, bolstered by strategic acquisitions like Symbol Technologies.
What strategic actions did Motorola take or consider in response to its performance?
Motorola undertook several strategic actions, including completing significant acquisitions in its Home and Networks Mobility and Enterprise Mobility Solutions segments. Importantly, the company announced it was evaluating strategic and structural realignment alternatives for its Mobile Devices business, potentially leading to its separation, to address its challenges and enhance shareholder value.
How did Motorola's R&D spending change in 2007?
Motorola's R&D expenditures increased by 8% to $4.4 billion in 2007 compared to 2006. The company stated that a strong commitment to R&D is required to drive long-term growth, with key investments focused on next-generation wireless products, applications, and services.
06—Continue