Moto announces first quarterly profit for 2007
$40 million profit reported for Q3
Motorola has shown signs of an upturn in its fortunes with the US telecommunications company announcing a profit of $40 million for the quarter despite an annual fall in revenues for the period.
The news comes after the vendor posted two consecutive quarterly losses in 2007 based largely on a drop in demand for its mobile devices. Sales revenues for the quarter stood at $8.8 billion, down annually from $10.6 billion, with the company shipping 37.2 million handsets over the surveyed period.
"We are pleased with the improvement in the financial performance of mobile devices and we look forward to building upon the progress we have made," said Ed Zander, chairman and chief executive officer.
"We have strengthened our leadership position in broadband video, WiMAX, next generation government and public safety and the enterprise mobility markets. With our focus on these key opportunities and the initiatives we are taking in mobile devices we will further improve our performance and create long-term shareholder value."
Industry analysts attribute the improved financial figures to enhanced cost-control measures adopted by the company, including 4,100 job cuts, with Motorola reporting a positive operating cash flow of $342 million and reduced cash conversion cycle to 43 days.
"During the third quarter, we maintained our focus on increasing cash flow, enhancing profitability and driving growth," said Tom Meredith, chief financial officer. "We are beginning to see improvements in our cash conversion cycle and operating cash flow which will lead to increased financial flexibility."
The company's home networks and mobility unit garnered $2.4 billion in sales revenue, up 6% year-on-year, with operating earnings of $165 million, excluding highlighted items.
Motorola's enterprise and mobility solutions segment enjoyed sales of $2 billion, up 47% compared with the year-ago quarter. Excluding highlighted items, operating earnings were $336 million, compared with operating earnings of $280 million for the year-ago period.