Motorola Inc. posted a second quarter ahead of most expectations, but investors appear to have expected such results as the company’s stock remained relatively unchanged after the news. Motorola’s stock was trading at around $19.86 per share Wednesday.
Motorola recorded companywide revenues of $8.8 billion, a 17-percent jump from the same quarter a year ago. Analysts polled by Thomson First Call predicted the company would report $8.5 billion in sales. Motorola’s earnings per share exploded by 52 percent to 38 cents, way ahead of expectations of 25 cents per share.
“It’s kind of feeling like the grand slam,” said Ed Zander, Motorola’s chairman and chief executive officer. “We are very pleased; we are very excited.”
In mobile phones, the company’s most important business, Motorola shipped a record 33.9 million handsets in the quarter-a number the company said gives it a solid No. 2 market share position of 18.1 percent. No. 3 player Samsung Electronics Co. Ltd. shipped 24.4 million phones in the quarter. Interestingly, Motorola’s Zander said the company is now gunning for the No. 1 position-which is dominated by Finnish vendor Nokia Corp. In the first quarter, Nokia held more than 31 percent of the market.
Motorola’s jump in handset shipments-which were far beyond most projections-was due partially to sales of low-end phones in emerging markets. Motorola earlier this year announced plans to sell $40 handsets through the GSM Association in places like India and Pakistan. Investment banking firm UBS said Motorola shipped 1.2 million of the low-end phones during the quarter.
Motorola said the margins on its low-end phones are similar to those on its higher-end phones.
Motorola’s mobile-phone business recorded sales of $4.9 billion, up 24 percent compared with the year-ago quarter. The business’ operating earnings were $498 million, up from the $396 million for the same period in 2004. The company said the results were based on strong sales of low- and high-end devices, including Motorola’s popular Razr device. Motorola said it has shipped more than 5 million Razrs.
In its Networks business, Motorola posted sales of $1.6 billion, up 3 percent compared with the year-ago quarter. Motorola’s first-half network sales also were up 9 percent compared with the first half of 2004. The company’s operating earnings increased to $263 million compared with $168 million in the year-ago quarter.
For the third quarter, Motorola predicted it would post revenues between $8.9 billion and $9.1 billion and earnings per share between 27 cents and 29 cents. The company’s projections were ahead of most analysts’ expectations.
