Will Motorola report first profit in three years?
NEW YORK -- Motorola Inc., the maker of phones and other telecommunications equipment, reports its third-quarter results before the stock market opens Thursday.
WHAT TO WATCH FOR: Long-suffering Motorola has signaled that it expects to report a year-over-year rise in revenue for the third quarter, which would be the first such increase in three years.
A big part of the reason it's pulling out of its dive is the cell phone business, which has scored some hits in the smart phone market since it started betting on Google Inc.'s Android software. A recent, high-profile model, the Droid X, started selling at the beginning of the quarter.
But while Motorola may no longer be in a dive, it's still at a much lower altitude than it used to fly at. In the second quarter, it sold 8.3 million phones. In the third quarter of 2006, when the Razr was still the most popular phone in the world, Motorola sold 53.7 million phones.
What's helping Motorola compared to last year is that it sells more of its pricey smart phones: 2.7 million in the second quarter. However, both Apple Inc. and Research In Motion Ltd. outsell Motorola by 10 million smart phones each, per quarter.
Motorola, based in Schaumburg, is likely to give an outlook for the fourth quarter, and has previously said that its phone business will post a profit for the period, the first in several years.
While it's been losing money on phones, Motorola has been held afloat by sales of cable set-top boxes, police radios and wireless network equipment.
WHY IT MATTERS: Motorola is set to split into two companies early next year, dividing an iconic U.S. electronics brand. The cell phone and cable box business will be called Motorola Mobility. Police radios, bar-code scanners and other products for corporate and government customers will be under Motorola Solutions.
The split is driven by a desire to present two simple stories to investors rather than one complex one.
In preparation for the split, Motorola said in July that it would sell its network equipment division for $1.2 billion to Nokia Siemens Networks, a Finnish-German joint venture. That deal is expected to close late this year.
WHAT'S EXPECTED: Motorola has said it expects to earn 10 cents to 12 cents per share in the current quarter, excluding some items. Analysts surveyed by Thomson Reuters expect it to earn 11 cents per share on $5.65 billion in revenue.
LAST YEAR'S QUARTER: Motorola earned $12 million, or a penny per share, in last year's third quarter, on revenue of $5.4 billion.