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Motorola faces setback in handset unit

Posted: 08 Dec 2010     Print Version  Bookmark and Share

Keywords:Motorola  handset  forecast 

Mark McKechnie, analyst, Gleacher & Co. says that Motorola's handset unit was reviving after years of weak performance until the recent slowdown. Calling it a "speed bump," Motorola's handset unit "Q4 is proceeding well, with handsets at the high-end of the company's 12-14 million guidance," McKechnie said.

"For Q1, Motorola indicated handsets would return to a loss," he said in a report. "Motorola hinted at the iPhone (being picked up by Verizon for the slowdown), in addition to normal seasonality. For the home group, Motorola expects sales and profits up year-over-year. We had forecast $32 million [Rs.142.94 crore] in operating profits for (the handset unit), so break-even marks about a penny miss for Q1, all else equal."

He said that "We maintain our view that the Verizon iPhone will mark a 'speed bump' rather than a dislocation and remain positive on Motorola's stock at current levels." He currently has a "BUY" rating on Motorola.

Motorola has approved the separation of Motorola Mobility Holdings Inc. from Motorola. Motorola Mobility is the handset unit.

The other unit is called Motorola Solutions Inc. Motorola Solutions is a provider of business- and mission-critical communication products and services for enterprise and government customers.

On Jan. 4, 2011, Motorola Inc. will change its name to Motorola Solutions and will begin trading on the New York Stock Exchange (NYSE) under the ticker symbol MSI, and Motorola Mobility will begin trading on the NYSE under the ticker symbol MMI.

- Mark LaPedus
EE Times

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