Motorola posts small 3Q profit, picks new CFO
By Chris Ziegler 
posted Oct 29th 2009 12:49PM
posted Oct 29th 2009 12:49PM
For Motorola, any profit at all is a Good Thing right now, so we're sure there are a lot of smiling faces out in Schaumburg today on news that the company managed just a smidge of black ink in the third quarter. The Mobile Devices division specifically turned in $1.7 billion in revenue (about $100 million less than the quarter prior) and accounted for a $183 million loss, which was offset by wins in the company's other divisions ultimately resulting in $12 million in bankable profit. The company says that it expects to push fewer handsets in the fourth quarter as it scales back "unprofitable" devices in favor of its new Android-based gear -- which is just fine by us -- and yes, indeed, it still intends to split the company into two entities when the time is right. In the meantime, the company has announced a permanent CFO -- Edward Fitzpatrick, who was conveniently already appointed to the position on an interim basis -- putting to bed some of the drama to bed that's surrounded Paul Liska, who vacated the post months ago on bad terms. All told, the DROID and CLIQ launches have cast a rosy glow on Moto's current situation, so now it's time to put the nose to the grindstone and see if these guys can deliver financially through the end of the year.Read - Earnings
Read - CFO announcement
I love when companies that everybody thinks will tank end up turning things around and making a comeback....hooray for competition!!
I don't think one quarter of positive earnings counts as a "comeback". Let's see how they do in 2010.
I remember when engadget - not long ago - used the same logo with an unhappy face. You see how life spins and yields surprises. Who would thought Motorola would create the most hyped Android phone to date.
how many times did engadget write off palm?
i'm really glad motorola is starting to turn things around. i got a lot of good use out of my RAZR (it survived several dunks in water), so i'm pulling for 'em. not to mention i don't want all those people to lose their jobs :/
I'm excited cus an American company is making a comeback and is providing an awesome device which is highly competitive. I love Palm and I wish the Pre made a bigger splash. I dont like that Palm still havent fixed the problems of no SMS Forwarding, no OSK and no Visual Voicemail. Also you guys have heard me complain about my dislike for the Pixi name and its femininity, and my refusal to buy a Pixi due to the name alone... But back to Moto, I think its awesome that they are back in the game, and this time playing with Android. I'll happily buy an awesome Moto device if it comes to Sprint.
Same thing with Palm; every one thought they were a gonna for sure and they back as well.
Wow. Seriously a profit after Sony n nokia losses. I'm shocked. N I thought apple was only recession proof company.
awwwwwww~
The droid and Cliq (well maybe not so much the cliq) should both help to boost there bottom line hopefully before the year closes...
HAPPYMOTO
$12 million. That's what collin Farrell gets paid to shoot a 90 minute movie . Hmmmmhh
me thinks you read the article wrong >=3
i don't think he read it wrong... they only pulled in $12 million above the green
there's a difference to profit and revenue.
exactly. If your company made $300B in revenue, but your profit was only $100,000, expect to be laughed at on Wall Street. troll wins :P
Well in that case, collin farrel only got paid 12 million i revenue. Since he has to pay for his house, cars, etc.
Dumb logic. Even if you climbed $100,000 in profit, you still have 300 BILLION in revenue. Yeah, I'll take the money over embarrassment, thank you.
Wonder who makes 1.7 billion off a 90-minute movie. Hmmmhh
Motorola is the only company I have fait can turn their losses and learn from them...... Theyre not overly competitive as far as what theyve put out. Now that they have to focus they will put out some amazing equipment. Droid is only the beginning I thing moto will kick HTC's ass..... Being a bit of an HTC fanboy its sad but true....
JESUS CHRIST IT'S THE DROID!! GET IN THE CAR!!
$900 million loss!!!!!?????
Oh no wait that was nokia. Sales say everything about smartphone desirability rate.
Aw coool, trollbait!
Sorry, ain't feeding you =P.
Yeah, sales say everything about desirability. Look at Symbian S60 and Windows' marketshare.
If droid lives up to the hype.
It should have no problem selling 1 million in first week
Depends on desirability rate of product.
Droid would generate $550 million in week one therefore saving moto.
In reality we all know that's not gonna happen droid is not will not be a supreme all desirable device. We know only one phone that can stir that much excitement. That's y we gate it n love it at sane time.
Lemme guess: would that phone be the HTC Hero? Or something by Nokia? Perhaps the Palm Pre. Couldn't be the iPhone, that'd just give you a reason to troll, no, couldn't be that....
Well, I'm going to be one notch in that 1 millions phones. I just e-mailed my sales rep about it 15 minutes ago.
Word, you're a moron. Even the original JesusPhone took 2 and a half months to hit a million units sold. Expecting a brand new phone to sell 1 million units in the first week, assuming production has even hit that level, is pretty dumb. Also, learn some goddamn English.
Moto comeback I like your phones, best material phone in the world, and now using ANDROID, u must be on the way to figth
Moto has always put out great hardware. Its a shame though that it took them sooo long to realize that they have only ever been a good hardware company. Software has never been their forte but due to the laziness of the decision makers. They kept the same archaic, limp-dick OS on their devices because it was easier than having to think up something new. As a result their software engineers are there to support legacy software instead of making things better.
Hardware engineers are always having to adapt to new concepts/technologies. If their SW guys were forced to do the same Moto would have put more compelling devices out and not lost their ass the way they did. I know we can't forget the whole argument about them resting on their laurels with the RAZR either but regardless, I guess its good to see that they are making positive steps towards NOT putting more folks out of work.
Toodles,
Former Moto
Oh yeah I'm sure the 2007 razr model hardware was kicking iPhones but.
Congrats to Moto! And their Symbol division which did pretty well.
I find it amazing how people are talking out of their asses, without understanding the issues. Fact is that Moto's phone business is in the toilet. It's not profitable and that's why they need to spin it out. It's a cancer that bogs down their other businesses. You guys just look at a single handset and rave about it, but have no idea about the bottomline. Sure, the Droid may sell well, but it might not generate any profit. Think about it. The hardware and its development does cost money. It's similar to the Xbox, which has not generated any profits. Microsoft can afford it, because their other businesses can compensate. If the Droid is simply an attempt to put Moto's phones back on the map, even if it contributes to the losses, that's fine. But make no mistake, eventually, this needs to be a sustainable business model. In the end, Moto may simply help Android and pave the way for better handset makers that actually turn a profit, but in the end, it might not save Moto's phone business.
In the end ... in the end. But it's the end ...
No, you are the one talking out of your ass. Motorola isn't looking to just spin off its dead phone business to save money. If you actually read anything about Motorola's efforts to reinvigorate their phone business by shutting down unprofitable product lines and creating new ones that can make money, you would realize that they are actually spending a significant amount of effort to make their phone business profitable again. There is no indication that the phone business is considered by Motorola to be a cancer that they must rid themselves off. They see it as a part of their company that must be rescued from the mismanagement it suffered for many years. And it's so much more than just a couple of handsets. If you read anything said by the company's executives you'd realize it's an entirely new strategy with big changes in their product line and dozens of new smartphones arriving on the market within a couple of years. Ultimately they may still spin off the phone business, but not because the phone business is dead. That doesn't even make any business sense, if the business is truly dead you kill it. No, they may spin it off because it will operate more efficiently on its own. Rather than operating as a conglomerate, Motorola can become two more efficient businesses each with a specific focus.
Why don't you take a look at the numbers?
Revenue continued to slide, however, falling 27 percent in the quarter to 5.45 billion dollars.
Revenue in the struggling Mobile Devices division declined 46 percent to 1.7 billion dollars.
Mobile Devices managed to narrow its operating loss however to 183 million dollars from 840 million dollars in the same three months last year and 253 million dollars in the previous quarter.
Motorola shipped 13.6 million handsets in the third quarter as its share of the mobile phone market fell below five percent to 4.7 percent.
This is not unlike the situation Palm is facing. Will the Pre save Palm? Will the Cliq or Droid save Moto? Obviously both are trying, but we don't know if it will succeed. Do any of these companies manage to make a profit out of their fancy phones? That's the big question. I'm sure Apple could easily put out the most amazing hardware you can think of if they miraculously decided to make less than 20-25% profits out of each iPhone they sell. But that doesn't float your stock. The problem all phone manufacturers face is that Apple for some reason can turn a huge profit out of their stuff, whereas others have to engage in a price war. You can hate Apple as much as you want (and believe me I do), but they seem to thrive even in the worst economy and you at least have to admire that.
I think we can all agree on Motorola's current situation. The problem is with forecasting. I think more than likely Droid will be profitable. The hardware costs of the Droid should be very similar to that of the iPhone 3G S, as the mostly components of both are comparable, except for the LCD screen. Both phones also retail for about the same price, with or without contract. So the difference in profitability between the two largely not due to manufacturing costs, but rather their revenue sharing model with their carriers, and Apple probably has a more advantageous agreement with AT&T than Motorola does with Verizon. On the other hand, software development and licensing costs for Apple is probably much higher than for Motorola. Motorola incurs minimal software development costs because they don't make the phone OS in-house, and they don't pay licensing for the core OS, only for some apps on top of the OS. So I don't think it's very clear at all that the profitability of this phone is so much worse than for the iPhone. And it's also not true that Motorola's phone strategy is to bank on one or two handsets. They are going with a more traditional full range product line, but with each model in line with modern phone standards, and focusing on one or two platforms around which to build their phone's software rather than developing inefficiently around multiple platforms.
Hear hear...
I am glad Moto is back...
I am a former Moto as well..
This is wonderful, it looks like android has saved motorola (their mobile phone devision atleast). Google isn't so bad after all.
The person who made the smiling moto is a genius and should make way more money.
Haha congrats Moto, you've still got a long way to catch up to Apple. Even in this economic slow-down, Apple still manages to rake in profits all the way. They must be doing something right.
Do they still make the RAZOR? I haven't seen them in stores lately.