Motorola trading stops, explores sale of mobile phone business

Shares of Motorola Inc. were halted after hours today on the New York Stock Exchange as the company released an announcement it is considering strategic options for its Mobile Devices segment.

The last trade was at 3:27 p.m. Shares were at $11.40, down 10 cents.

The stopped trading came just after Motorola said it would explore a sale of its 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 does not intend to discuss developments with respect to the exploration of strategic alternatives unless or until its board of directors has approved a definitive transaction or the process is otherwise complete," the company said in the statement. "There can be no assurance that any transaction will occur or, if one is undertaken, its terms or timing."

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."