July 20, 2006 Motorola Income Rises 48% on Cellphone and Cable Box Sales By KEN BELSON NY Times
http://www.nytimes.com/2006/07/20/technology/20motorola.html?pagewanted=print Motorola, the worlds second-largest mobile phone maker, said yesterday that its profit jumped 48 percent in the second quarter on the strength of record shipments of cellphones and digital set-top boxes. Since shedding several unprofitable divisions over the last two years, Motorolas sales have grown at all its remaining divisions. Notably, the company has been able to gain market share in handsets because of strong demand for its Razr and Q phones in the United States and surging sales in China and other developing economies. The strong performance was at odds with some analysts predictions of slower industry growth in technology products, including cellphones, as well as the declining share prices of many technology stocks in recent months. Motorola, which is based in Schaumburg, Ill., earned $1.38 billion, or 55 cents a share, in the second quarter, compared with $933 million, or 37 cents a share, in the corresponding period last year. It benefited from one-time gains worth 21 cents a share. Financial analysts had expected a profit around 30 cents a share before the one-time gains. Revenue reached $10.9 billion in the quarter, nearly 30 percent more than the $8.4 billion last year. The company expects strong sales of its cellphones to help third-quarter sales rise to a range of $10.9 billion to $11.1 billion. That would represent an increase of 20 percent to 23 percent compared with the 2005 period. The numbers are stunning despite all the gloom and doom around technology, said Edward J. Zander, Motorolas chief executive, who said his company had been gaining market share from Samsung, LG and other rivals. Motorola has been selling more cellphones, including the Q, that are designed for sending e-mail as well as talking. Over all, the company shipped 52 million handsets in the quarter, a 53 percent increase. It said it now controlled about 22 percent of the global handset market, 4.3 percentage points above its share in the quarter a year earlier. Motorola said it shipped a record 2.4 million digital set-top boxes to meet demand from cable companies. Mr. Zander said business had not been affected by the recent merger of Cisco Systems and Scientific-Atlanta, the second-largest maker of set-top boxes in the United States. Despite the companys performance, Motorolas shares have slipped more than 16 percent this year. Yesterday, the stock rose 37 cents, to $19.25. The bond-rating agency Fitch raised its rating yesterday on Motorolas debt to A from BBB+, citing the companys stronger cash flow and debt reduction. Fitch also remains comfortable with Motorolas operating profile. The companys larger competitor, Nokia, releases its earnings today. Yahoo said yesterday that it had signed a deal with Motorola to have its Yahoo Go for Mobile service automatically installed on new Motorola handsets starting in the first half of next year. The service lets users read their Yahoo mail, and get access to their address books and other features. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
