Motorola confirms gloomy 2Q07 figures

US vendor Motorola saw revenues from its mobile devices unit alone plummet 40% year-on-year to US$4.3 billion representing an operating loss of US$264 million during 2Q07.

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By  Ronan Shields Published  July 22, 2007

US vendor Motorola saw revenues from its mobile devices unit alone plummet 40% year-on-year to US$4.3 billion representing an operating loss of US$264 million during 2Q07.

The company lost its second position in the handset market, in terms of unit shipments, to South Korean rival Samsung, with Motorola's share of the global handset market for the quarter standing at an estimated 13.5%.

The vendor shipped 35.5 million units for the period and highlighted its continued leadership in the Latin and North American markets.

Industry commentators have speculated that Motorola's poor performance was largely the result of price competition in the handset market as well as an unfavourable product mix.

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

Motorola posted overall revenues of US$8.7 billion from its operations for the quarter, representing an operating loss of US$158 million, down from an operating profit of US$1.5 billion for the year ago period.

However, revenues from the enterprise mobility solutions segment rose 42% year-on-year to US$1.9 billion with the company reporting particularly strong demand in the EMEA and Asia Pacific regions.

The company also trumpeted its 9% annual rise in sales from its home networks and mobility unit with revenues totaling US$2.6 billion for the quarter.

"Our efforts are focused on improving cash flow from operations and enhancing profitability," said Tom Meredith, chief financial officer. "In addition to cost controls and headcount reductions, which we expect will result in cost savings of US$1 billion in 2008, we intend to significantly improve our cash conversion cycle and our return on invested capital."

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