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Motorola sees weak quarter, suspends dividend
2009-02-03
NEW YORK - Motorola Inc (MOT.N) forecast a deeper-than-expected first-quarter loss, suspended its quarterly dividend, and said it was looking for a new chief financial officer, sending its shares down 10 percent. The embattled cell phone maker slid to fifth place from fourth in global rankings in the last quarter, and has been losing ground for two years, lacking a popular phone to compete with Nokia (NOK1V.HE), Samsung Electronics (005930.KS), LG Electronics (066570.KS) and Sony Ericsson (ERICb.ST) (6758.T). Motorola, which also makes television set-top boxes and wireless gear, forecast a first quarter loss per share of 10 cents to 12 cents, wider than the average Wall Street estimate for a loss of 5 cents, according to Reuters Estimates. Avian Securities analyst Matthew Hoffman said he was expecting Motorola's handset unit to suffer, but he was worried the poor outlook could mean the rest of the business was also weak due to the economic recession. "The question is what's the driver for these lower expectations," he said. Hoffman said it made sense for Motorola to conserve cash by suspending its 5 cents per share quarterly dividend but he said he was anxious for more details on the executive departure. Motorola named its corporate controller Edward Fitzpatrick as acting CFO to replace Paul Liska, without explaining Liska's departure. The company reported a net loss of $3.6 billion, or $1.57 per share, compared with a profit of $100 million, or 4 cents a share, a year earlier. Excluding charges for items such as goodwill amortization, Motorola's loss would have been 1 cent per share, compared with Wall Street's forecast for a loss of 2 cents a share, according to Reuters Estimates. Revenue fell 26 percent from a year earlier to $7.14 billion, compared with analyst expectations for $7.07 billion. Motorola, which faces competition from Apple Inc's (AAPL.O) iPhone, said mobile device revenue fell 51 percent to $2.35 billion in the fourth quarter, and its operating loss widened to $595 million from $388 million a year ago. Its home and networks business, which sells set-top boxes and wireless network gear, posted an operating profit of $257 million on revenue that fell 5 percent to $2.6 billion. The enterprise mobility unit, which serves corporate customers, posted an operating profit of $466 million on revenue that rose 4 percent to $2.2 billion. Executives said on a conference call they expect operating results to improve after the first quarter, but that visibility remained limited due to the uncertain economy. Motorola shares fell to $4.10 in early trade after a $4.54 close in regular New York Stock Exchange trade. (Reporting by Sinead Carew; Editing by Derek Caney)
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