Motorola Profit Up as Sales Rise 26%

Motorola Inc. on Tuesday said third-quarter profit quadrupled as new handset models increased sales. But its stock fell after the company said it had lost market share.

Net income rose to $479 million, or 20 cents a share, from $116 million, or 5 cents, a year earlier, Schaumburg, Ill.-based Motorola said. Sales rose 26% to $8.62 billion.

Chief Executive Ed Zander, who sped up the introduction of new phones to bolster sales, faces increased competition from Nokia, which is cutting phone prices.

After boosting Motorola’s share of the global mobile-phone market for two quarters, Zander said, the company lost some ground in the third quarter. Revenue this quarter may be as low as $9.3 billion, compared with the average analyst estimate of $9.5 billion.

Shares of Motorola, which had risen 32% this year, fell 91 cents to $17.59 in extended trading. They earlier had dropped 22 cents to $18.50 on the New York Stock Exchange.

Motorola’s gross margin, a measure of profitability, widened to 36.2% from 34%. Profit of 20 cents a share in the third quarter beat the 19-cent average estimate of analysts surveyed by Thomson First Call, though revenue was less than the estimated $8.68 billion.

Fourth-quarter profit will be 23 cents to 26 cents a share, compared with 20 cents a year earlier, Motorola said. Sales are expected to be $9.3 billion to $9.6 billion.

Zander said Motorola would regain market share this quarter.

“We are the No. 2 supplier and will continue to gain market share in the fourth quarter. What happened in the third was just noise,” Zander said during a conference call with analysts.

Motorola introduced 17 new models in the period, bringing the total to 40 this year, Chief Operating Officer Mike Zafirovski said during the call. More than 50% of the phones are equipped with cameras.