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Fri, Jul 21, 2006 - Page 10 News List

Motorola reports record shipments

PROFIT BOOST Shedding unprofitable units helped the cellphone giant as it capitalized on soaring demand for its popular Razr and Q model phones


Motorola Inc, the world's second-largest mobile phone maker, said on Wednesday that its profit jumped 48 percent in the second quarter on the strength of record shipments of cellphones and digital set-top boxes.

After it shed several unprofitable divisions over the last two years, Motorola's sales grew at all its remaining divisions. Notably, the company has been able to gain market share in handsets because of strong demand for its Razr and Q phones in the US and surging sales in China and other developing economies.

Strong performance

The strong performance was at odds with some analysts' predictions of slower industry growth in technology products including cellphones as well as the declining share prices of many technology stocks in recent months.

Motorola earned US$1.38 billion, or US$0.55 a share, in the second quarter, compared with US$933 million, or US$0.37 a share, in the corresponding period last year. It benefited from one-time gains worth US$0.21 a share.

Financial analysts had expected a profit around US$0.30 a share before the one-time gains.

Revenue reached US$10.9 billion in the quarter, nearly 30 percent more than the US$8.4 billion last year. The company expects strong sales of its cellphones to help third-quarter sales rise to a range of US$10.9 billion to US$11.1 billion. That would represent an increase of 20 percent to 23 percent compared with the same period last year.


"The numbers are stunning despite all the doom and gloom around technology," said Edward Zander, Motorola's chief executive, who said his company had been gaining market share from Samsung Electronics Co, LG Electronics Inc and other rivals.

Motorola has been selling more cellphones, including the Q, that are designed for sending e-mail as well as talking. Overall, the company shipped 52 million handsets in the quarter, a 53 percent increase. It said it now controlled about 22 percent of the global handset market, 4.3 percentage points above its share in the quarter a year earlier.

Motorola said it shipped a record 2.4 million digital set-top boxes to meet demand from cable companies.

Zander said business had not been affected by the recent merger of Cisco Systems Inc and Scientific-Atlanta, the second-largest maker of set-top boxes in the US.

The company's larger competitor, Nokia Oyj, released its earnings yesterday.

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