Moto stock free-falling after company reports 4Q profits fell 84 percent
Schaumburg-based Motorola Inc. said today it's fourth-quarter profits plunged 84 percent and next quarter will show more losses, news that sent its stock into a 23-percent free fall during mid-day trading.
Motorola Chief Executive Officer Greg Brown told Wall Street analysts he is not satisfied with the company's performance, warned that the next quarter likely will show losses and vowed to continue restructuring, seeking an additional $500 million in cost-cutting, mostly from the Mobile Devices business.
The wireless phone division posted a 38 percent sales loss and even showed sluggish sales during November and December, the holiday shopping season.
During an interview Brown declined to say how he further plans to cut into Mobile Devices and whether any of that would translate into layoffs or plant closings.
"Just say the emphasis will be on the Mobile Devices business and its activities," Brown said.
He said, however, the Mobile Devices headquarters will remain in Libertyville.
Motorola had a worldwide workforce of about 65,000 in December, down from 72,000 after acquisitions of Symbol and other smaller companies.
While the phone portfolio has long been mocked by Wall Street analysts, Brown promised to offer new products in the multi-media 3G phone line, which has been sidelined, Brown said.
"We have struggled in that area and see that as an opportunity for us to pursue now," said Brown.
Brown replaced Ed Zander, who resigned after four years. The communications company saw hope when Zander took over in 2004, but after the ultra-thin Razr phone hit its peak, sales and worldwide market share began falling.
Between the bleak fourth-quarter and year-end results and the even bleaker forecast for the first-quarter of this year, Motorola's stock dived.
Shares were trading at $9.46, down $2.86 or 23 percent, in mid-day trading, the lowest in more than five years.
The balance sheet showed fourth-quarter net earnings were $100 million, compared to $623 million in the same period a year ago.
Fourth-quarter sales were $9.6 billion, or 4 cents a share, down from $11.8 billion, or 25 cents a share, in the same period a year ago.
For the full year of 2007, Motorola's net loss was $49 million, compared to a profit of $3.6 billion in 2006. Sales for 2007 were $36.6 billion, compared to $42.8 billion in 2006.