Motorola posts $28M net loss for Q2

By Colleen Taylor, Contributing Editor -- Electronic News, 7/19/2007

Despite the company's recent attempts to regain profitability, Q2 turned out to be yet another rough quarter for Motorola Inc.

In its financial results reported today, Motorola posted Q2 sales of $8.7 billion, down 19.2 percent year-over-year and down 7.7 percent from Q1. The company posted a net loss of $28 million, down from the $1.38 billion profit the company made in Q2 2006, but up from the $181 million net loss the company posted in Q1.

As Motorola warned last week, the company's mobile devices segment turned in a particularly dismal Q2 performance, with sales of $4.3 billion, down 40 percent compared with the year-ago quarter and down 20.3 percent from its Q1 sales. The segment incurred an operating loss of $264 million, down from the operating earnings of $804 million the segment saw in Q2 2006 and also down from the loss it incurred in Q1 of $231 million.

Motorola blamed the mobile devices segment's lower sales and earnings on lower overall unit volumes, particularly in Asia, and the Europe, Middle East and Africa region.

"This was a challenging quarter for Motorola in which revenue fell short of our expectations due to a decline in mobile device unit shipments," Ed Zander, Motorola's chairman and CEO, said in a statement.

The company has been working in recent months to get back in fighting form and recoup from several consecutive lackluster quarterly earnings reports. In recent months, Motorola has embarked on a plan to cut some 7,500 jobs and has made several managerial changes, including moving the head of its supply chain organization to its mobile devices business.

Looking ahead to Q3, the company said its outlook for earnings per share from continuing operations is flat to slightly up compared to its Q2 earnings from continuing operations excluding highlighted items While the company does not expect the mobile devices business to be profitable for the full year, it said that it does expect its financial results to improve in the second half of the year.