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Handsets shipped 4th Quarter All Year . 2005 44.7 million 146 million 2004 31.8 million 104 million Mindfully.org
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Motorola Inc. reported an 86% increase in earnings for the fourth quarter, fueled by the popularity of its thin handsets and recovery of more than half a billion dollars in debt outstanding from a Turkish wireless operator.
The Schaumburg, Ill., telecom-equipment maker also said it expects strong handset sales to help its first-quarter results. It expects earnings of 27 cents to 29 cents a share, excluding stock-option expenses of about two cents a share, on sales of between $9.3 billion and $9.5 billion. In the year-earlier period, Motorola reported net income of 28 cents a share, including a gain.
The handset division has driven the turnaround of Motorola amid rising shipments to emerging markets. Still, analysts say lower selling prices there are expected to put pressure on industry margins.
The company said its net income for the fourth quarter jumped to $1.2 billion, or 47 cents a share, compared with earnings of $647 million, or 26 cents a share, in the year-earlier quarter. Sales increased 18%, to $10.43 billion.
Motorola said its share of the global market for mobile phones in the quarter had increased to 19%, up three percentage points from the year-before quarter and up half a percentage point from the third quarter of 2005.
Nokia Corp. of Finland has the largest share, with about 33% of the market in the third quarter, according to Gartner Inc., a technology-research firm based in Stamford, Conn. Nokia reports its fourth-quarter earnings next week. In third place is Samsung Electronics Co. of South Korea with a share of about 13%.
Motorola said it was unable to meet all demand for its cellphones during the holiday season, the key season for cellphone sales. Chief Executive Ed Zander noted that the company couldn't meet demand in the market because of "supply constraints."
"We do not anticipate these problems going forward," he added.
Motorola announced its earnings after the market closed yesterday, when the stock finished at $24.35, up 4% from Wednesday's close of $23.34. In after-hours trading, however, the stock slid 6% to $22.90.
"The results are broadly in line with expectations and show solid handset revenue growth and share gains," said Tim Luke, telecom analyst at Lehman Brothers. "Despite some delays on new products, we expect further share gains going forward."
For the year, net income was $4.58 billion, or $1.81 a share, up from $1.53 billion, or 64 cents a share, the year before. The collection of half a billion from Turkish wireless operator Telsim Mobil Telekomunikasyon, or Telsim, made during the fourth quarter, accounted for earnings of 13 cents a share. Motorola reported revenue of $36.84 billion, an 18% increase from sales of $31.32 billion in 2004.
The figures were driven by strong sales in the mobile-devices division, which accounted for about 58% of its total revenue for 2005, up from 55% the year before. Motorola shipped 44.7 million handsets in the fourth quarter compared with 31.8 million in the last quarter of 2004, and 146 million for the year, a 40% increase from the year earlier.
Its new products included versions of the smooth-shaped PEBL clamshell phone and the ultra-slim SLVR to meet demand for candy-bar or nonfoldable phones, which are more popular around the world.
Among the company's other divisions, its networks business showed sales of $1.5 billion, down 4% from the year-earlier quarter. Its government and enterprise-mobility segment showed sales of $1.8 billion, up 8%.
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