Motorola explores sale of phone business; stock trading resumes

After-hours trading of Motorola Inc. stock was temporarily halted today on the New York Stock Exchange after the company announced it is considering a sale of its beleaguered Mobile Devices business.

Halted at 3:27 p.m., shares were at $11.40, down 10 cents. As the news came out about a half-hour later and trading resumed, the shares zoomed up around 12 percent, trading at $12.85, up $1.35.

"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."