Motorola surprises with second quarter profit

Troubled handset and equipment vendor Motorola posted happy news late Thursday when it announced a surprise profit for the second quarter of 2009 as the cost cutting excercises paid dividends.

The company delivered $26m in net earnings, up from a profit of $4m in the same period last year and a run of losses over the preceding quarters. However, net sales plummeted from $8bn in the second quarter of 2008 to $5.5bn in 2009 as consumers stopped buying handsets and operator bought less kit.

Sales at the Mobile Devices segment were $1.8bn, down 45 per cent compared to the year ago quarter. Operating loss was $253m, compared to an operating loss of $346m in the second quarter of 2008, but down from $509 million in the first quarter of 2009.

Motorola shipped 14.8 million handsets over the three month period, giving it an estimated global handset market share of 5.5 per cent. The company is preparing to unveil a raft of Android-based devices starting in the fourth quarter in a bid to revive its handset portfolio.

Sanjay Jha, co-CEO of Motorola and CEO of Mobile Devices, said: “We have agreements in place with carriers and remain on track to bring our new smartphone devices to market for the holiday selling season. We are also excited about our 2010 portfolio and are pleased with the customer feedback. In Mobile Devices, we improved the operating loss, reflecting a lower cost structure, and substantially reduced cash consumption as compared to the first quarter.”

The Home and Networks Mobility division recorded sales of $2bn, down 27 per cent compared to the year ago quarter. Operating earnings for networks were $153m, compared to earnings of $245m a year ago.