Summary
Motorola, Inc. (MSI) reported its third-quarter and year-to-date results for the period ending September 29, 2007. The company experienced a significant revenue decline, with net sales falling 17% year-over-year to $8.8 billion in the third quarter and 13% year-over-year to $27.0 billion for the first nine months. This decline was primarily driven by a substantial drop in the Mobile Devices segment, which saw net sales decrease by 36% in the quarter due to lower unit shipments and average selling prices, and a 31% decrease year-to-date. The company also reported a significant drop in earnings from continuing operations, with third-quarter earnings of $40 million ($0.02 per diluted share) compared to $727 million ($0.29 per diluted share) in the prior year quarter. For the nine-month period, the company reported a net loss of $149 million, a stark contrast to a net earning of $3.0 billion in the same period of the prior year. Despite the challenging top-line performance, the Enterprise Mobility Solutions segment showed robust growth, with net sales increasing by 47% in the third quarter, largely due to the acquisition of Symbol Technologies. The company is implementing significant cost-reduction initiatives, including workforce reductions, and is focused on improving profitability, particularly within the Mobile Devices segment, by streamlining its product portfolio and operational efficiency. The company also continues to actively repurchase shares, with approximately $4.3 billion remaining authorization under its share repurchase program.
Key Highlights
- 1Net sales decreased 17% year-over-year to $8.8 billion for the third quarter of 2007, primarily due to a 36% decline in the Mobile Devices segment.
- 2Earnings from continuing operations for the third quarter of 2007 were $40 million ($0.02 per diluted share), a significant decrease from $727 million ($0.29 per diluted share) in the third quarter of 2006.
- 3The company reported a net loss of $149 million for the nine months ended September 29, 2007, compared to a net earning of $3.0 billion for the same period in 2006.
- 4The Enterprise Mobility Solutions segment demonstrated strong growth, with net sales increasing 47% year-over-year in the third quarter, driven by the acquisition of Symbol Technologies.
- 5Mobile Devices segment's unit shipments decreased 31% in the third quarter, and the segment is undergoing a strategic rebalancing towards profitability.
- 6The company generated $315 million in operating cash flow from continuing operations for the nine months ended September 29, 2007, down from $2.8 billion in the prior year period.
- 7Motorola continued its share repurchase program, with $4.3 billion remaining authorization as of September 29, 2007.