Motorola explores breakup of company

Motorola Inc. announced today it is considering a sale of its beleaguered Mobile Devices business.

"All of our businesses have exceptional people, products and intellectual property and the ability to achieve category leadership in their markets," President and CEO Greg Brown said in a statement.

"We are exploring ways in which our Mobile Devices Business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise."

The company further said it would not discuss developments until its board of directors approves any definitive transaction or the process is otherwise complete.

"There can be no assurance that any transaction will occur or, if one is undertaken, its terms or timing," the statement further said.

In the most recent quarter, the Schaumburg company's mobile handset sales were down over 33 percent year-over-year and gross margins have been materially impacted, said David Weissman, senior telecom analyst with Zacks Investment Research in Chicago.

"We believe that Motorola is now exploring opportunities in higher margin business and may need to possibly divest or restructure its handset business as part of overall initiatives to recreate improved shareholder value," said Weissman. "We continue to maintain a hold rating on shares of MOT with a valuation target of $13."

Trading in Motorola's stock temporarily came to a halt after hours before shooting up $1.23 to $12.73. Shares had risen 21 cents to $11.50 in the normal trading session -- down 28 percent in 2008 and 56 percent since hitting a six-year high of $26.30 in October 2006.