01—Abstract
Summary
Summary of the 10-K filed February 16, 2010. Cited figures are marked; the original filing is the authoritative source.
Motorola, Inc. reported revenues of $22.0 billiona for the fiscal year ended December 31, 2009, a decrease of 27% from the previous year, reflecting a challenging global economic environment.
The company incurred an operating loss of $148 millionb, a significant improvement from the $2.4 billion operating loss in 2008, largely due to the absence of substantial goodwill impairment charges and ongoing cost reduction initiatives. The company's Mobile Devices segment continued to struggle, with net sales down 41% and an operating loss of $1.1 billion. However, the segment saw positive signs with the launch of two Android-based smartphones in Q4 2009, which garnered strong consumer reception and contributed to an increase in average selling price.
The Home and Networks Mobility segment's net sales decreased by 21%c, with operating earnings down 39% due to market softness. The Enterprise Mobility Solutions segment experienced a 13% decline in net sales, with operating earnings falling 29%, also impacted by economic conditions, though it maintained its market leadership and profitability.
Despite the revenue decline, Motorola demonstrated improved operating cash flow of $629 milliond in 2009. The company is also progressing with its plan to separate into two independent, publicly traded companies, targeting completion in the first quarter of 2011, which aims to unlock value and allow each business to focus on its strategic priorities.
02—Key points
Key Highlights
- Net sales decreased by 27% to $22.0 billion in 2009, primarily driven by a 41% drop in the Mobile Devices segment.
- The company reported an operating loss of $148 million, an improvement from a $2.4 billion operating loss in 2008, largely due to reduced impairment charges and cost savings.
- The Mobile Devices segment launched its first Android-based smartphones in Q4 2009, which were well-received and led to an 8% increase in the segment's average selling price.
- Operating cash flow improved significantly, reaching $629 million in 2009, a 160% increase from $242 million in 2008, driven by inventory reduction and better working capital management.
- Motorola continued its plan to separate into two independent companies, targeting completion in Q1 2011, with the aim of creating distinct entities for its Mobile Devices/Home and Enterprise Mobility Solutions/Networks businesses.
- The company reduced its workforce by approximately 11,000 employees during 2009 as part of its cost-reduction initiatives.
- The Home and Networks Mobility segment experienced a 21% decline in net sales, with the home business impacted by reduced capital spending from North American operators due to economic conditions.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, Motorola Solutions, Inc. lost $0.01.
- Revenue$6.95B100.0%
- Cost of revenue−$3.47B49.9%
- Gross profit$3.48B50.1%
- Operating costs−$2.91B41.9%
- Operating income$567.0M8.2%
- Interest, other & tax−$618.0M8.9%
- Net income−$51.0M0.7%
Where FY2009 revenue went
$6.95B- Cost of revenue: $3.47B, 50% of revenue
- SG&A: $1.66B, 24% of revenue
- R&D: $993.0M, 14% of revenue
- Operating income: $567.0M, 8.2% of revenue
- Other operating costs: $255.0M, 3.7% of revenue
Kept 8.2% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 16, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $6.95B$25.11B | −72.3% |
| Cost of Revenue | $3.47B$18.17B | −80.9% |
| Gross Profit | $3.48B$6.94B | −49.9% |
| R&D Expenses | $993.00M$3.40B | −70.8% |
| SG&A Expenses | $1.66B$3.91B | −57.5% |
| Operating Income | $567.00M-$2.54B | +122.3% |
| Interest Expense | $207.00M$223.00M | −7.2% |
| Net Income | -$51.00M-$4.24B | +98.8% |
| EPS (Basic) | $-0.16$-13.11 | +98.8% |
| EPS (Diluted) | $-0.15$-13.11 | +98.9% |
| Shares Outstanding (Basic) | 327.90M323.60M | +1.3% |
| Shares Outstanding (Diluted) | 329.90M323.60M | +1.9% |
05—Questions
Frequently Asked Questions
What was Motorola's overall financial performance in 2009?
In 2009, Motorola reported net sales of $22.0 billion, a 27% decrease from 2008, primarily due to a challenging global economic environment that impacted all segments. The company managed to reduce its operating loss to $148 million from $2.4 billion in 2008, showing signs of operational improvement and cost control, despite the revenue decline. Operating cash flow also improved substantially.
How did the Mobile Devices segment perform, and what are the key developments?
The Mobile Devices segment continued to face significant headwinds, with net sales down 41% and an operating loss of $1.1 billion. However, Motorola launched its first Android-based smartphones in the fourth quarter of 2009, which were positively received by the market and helped increase the segment's average selling price by 8%. This represents a strategic shift towards higher-margin smartphones.
What is the status of Motorola's plan to separate into two companies?
Motorola announced its intention to separate into two independent, publicly traded companies, targeting completion in the first quarter of 2011. The separation aims to create distinct entities for its Mobile Devices and Home businesses, and its Enterprise Mobility Solutions and Networks businesses, allowing each to better focus on its respective market opportunities and strategies.
What impact did the global economic downturn have on Motorola's operations?
The global financial crisis and subsequent economic downturn significantly impacted Motorola's sales across all segments, leading to reduced demand from customers, tighter inventory management, and increased requests for vendor financing. The company responded with significant cost-reduction actions, including workforce reductions and restructuring.
06—Continue