Motorola's woes continue with Q1 results

Motorola has revealed worsening financial losses late yesterday, as sales in its mobile phone business fell further.

The voice and data device vendor reported first-quarter (Q1) net losses of $194 (£98.3 million), compared to a $181 million (£91.7 million) loss for the same quarter last year.

It growing losses outdid analyst expectations, with sales of $7.5 billion (£3.8 billion), compared to $9.4 billion (£4.8 billion) during the same period last year. This amounted to a loss of $0.09 per share, where analyst consensus gathered by Thomson Financial had predicted the company would post a $0.07 loss per share on sales of $7.8 billion (£3.95 billion).

Motorola's main problem was that it sold 18 million fewer mobile phone handsets than the 45.4 million it sold during the same quarter last year, creating a 39 per cent shortfall in comparison to the revenue it generated in its first quarter of 2007. The 27.4 million units it did sell in Q1 compares to nearly 116 million mobiles its market leading rival, Nokia sold during the same period.

In response to the bleak performance, Motorola chief executive Greg Brown said that the company would improve its mobile phone portfolio, as well as look to restructure the business by splitting its mobile devices and broadband and mobility businesses into two separate public entities.

Carolina Milanesi, Gartner research director commented that, rather than splitting the company, it should concentrate on revamping its handset portfolio and reassuring mobile operators of its product roadmap.

"The decision to create two separate companies does not solve the issues, and might have created some more uncertainty," she added.

On a more positive note, sales in Motorola's Enterprise Mobility Solutions business were up 5 per cent year-on-year to $1.8 billion (£912 million), with increased earnings from $131 million (£66.3 million) last year to $250 million (£126.6 million.

And, although sales in its Home and Networks Mobility division rose 2 per cent, earnings in this part of the company fell by $14 million (£7.1 million) year-on-year to $153 million (£77.5 million).

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