Cellphone Demand Lifts Motorola Profit
Motorola Inc. said Tuesday that its third-quarter earnings more than tripled on record sales as it continued to pick up market share in the global cellphone market.
All four of its business units showed profitable growth during the quarter, not counting reorganization costs, and the cellphone division turned in a whopping 41% increase in sales behind the Razr and other phones.
Motorola said net income was $1.75 billion, or 69 cents a share, compared with $479 million, or 18 cents, a year earlier, not counting the semiconductor unit which it has since spun off. Revenue climbed 26% to $9.42 billion.
Excluding one-time items, the Schaumburg, Ill.-based company had operating earnings of 30 cents a share -- 2 cents better than the average estimate of analysts surveyed by Thomson Financial.
Motorola said it increased its cellphone market share to 19% -- up 5.5% from a year earlier and about 1% from the second quarter of 2005.
The company shipped 38.7 million handsets during the quarter, up 66% from a year earlier and a reflection of the slew of new phones it continues to develop.
The high-margin, ultra-thin Razr clamshell phone continued to set the pace with more than 6.5 million units sold in the quarter. The company also started shipping two new phones from the Razr “family” after the quarter ended in hopes of building on that momentum.
Analyst Mike Walkley of Piper Jaffray & Co. said a survey of store owners indicated disappointing early sales of another new Motorola product -- the Rokr -- which was released last month and comes loaded with iTunes software in a partnership with Apple Computer Inc. Nonetheless, he said, an overall strong portfolio of products and the solid third-quarter results suggest the company can continue its move upward.
The company said it expected fourth-quarter earnings of 32 cents to 34 cents a share, in line with analysts’ estimate of 33 cents. It forecast revenue of $10.3 billion to $10.5 billion, higher than analysts’ estimate of $10 billion.
Motorola shares rose 23 cents to $20.17 before the earnings announcement. In after-hours trading, the shares rose 63 cents.
