Razr sharpens Motorola earnings for Q3

Strong sales of its mobile phones including the ultra slim Razr handset helped Motorola report record sales and earnings from continuing operations in the third quarter and gain market share.

Motorola, which ranks as the biggest mobile phone vendor in North America and the world’s second-largest mobile phone maker after Finland’s Nokia, reported a profit of $1.75bn, or 69 cents per share compared with $479m, or 20 cents per share a year earlier before the Schaumburg, Illinois-based company spun off its semiconductor unit.

“We are very excited about our third quarter results and overall performance year-to-date,” said Ed Zander, Motorola’s chief executive, who has helped to boost sales and profits and rebuilt Motorola’s reputation for delivering innovative mobile phones since taking over in early 2004. “Excluding re-organisation charges, all four of Motorola’s businesses grew profitably during the quarter.”

Mr Zander said the network division had “a blow-out quarter’ and added that sales of its “connected home” devices including cable modems and set-top boxes were also strong.

Overall, Motorola shipped 39m mobile phones during the quarter including 6.5m Razr units and 250,000 of its recently launched iTunes Rokr music phone.

Mr Zander said mobile phone sales were strong across all market segments and added that average selling prices were roughly flat. As a result, Motorola claimed that its share of the global mobile phone market increased by 5.5 percentage points to 19 per cent compared with the year-ago period and by about 1 percentage point over the 2005 second quarter.

Excluding special items including tax benefits and a gain related to Sprint’s $36bn purchase of Nextel Communications, Motorola earned 30 cents per share in the latest quarter.

Revenues climbed to $9.42bn from $7.5bn a year ago, boosted largely by the strength of the group’s mobile devices segment which includes its mobile phone business. Sales in the mobile devices division increased by 41 per cent to $5.6bn while operating earnings jumped to $597m from $394m a year earlier.

Motorola predicted fourth-quarter sales of between $10.3bn and $10.5bn with profit from operations of between 32 cents to 34 cents a share. The stock closed on Tuesday up 23 cents at $20.17, ahead of the earnings announcement.