Motorola surprised the Street with a small profit in Q3 and announced stronger-than-expected earnings guidance for the crucial holiday period. The best news: its most important device, the Droid smartphone for Verizon Wireless, has been getting good initial reviews.
Smartphones are important to Motorola because they bring in more revenue and profits per device than “dumb” phones. They’re also important because they’re the best qualitative indicator of whether new CEO Sanjay Jha can really turn Motorola around. Before he arrived, Motorola was terrible with smartphones. Now they seem to be getting quite good.
Still a lot of work left, but this is all-around good news, and no surprise that MOT shares are up 8% in pre-market trading.
DON’T MISS: Motorola Droid First Hands On: It’s A Terminator
More from the AP:
NEW YORK (AP) — Motorola Inc. reported an unexpected quarterly profit Thursday as operating losses in its struggling mobile phone division narrowed. The company also forecast stronger-than-anticipated earnings for the current period.
Motorola shares jumped 64 cents, or 8 per cent, to $8.60 in premarket trading.
The results marked Motorola’s second straight quarter in positive territory after months of heavy losses and shrinking market share in the cell phone business.
Sales continued to fall, but the company is pinning its turnaround effort on a new slate of phones powered by Google Inc.’s Android operating system. Two of the phones, including a new device called the Droid introduced by Verizon Wireless on Wednesday, will be available as the holiday season arrives.
Dovetailing with the release, Motorola offered an upbeat forecast for the quarter ending in December. It expects adjusted earnings of 7 cents to 9 cents per share, while analysts polled by Thomson Reuters expected 6 cents.
In the most recent quarter, the company based in Schaumburg, Ill., earned $12 million, or a penny per share. That compares with a loss of $397 million, or 18 cents per share, in the same quarter a year ago.
Excluding unusual items, Motorola says its adjusted earnings were 2 cents per share. Analysts had expected a break-even quarter, according to a Thomson Reuters poll.
Sales fell 27 per cent to $5.4 billion from $7.5 billion a year ago. Analysts were looking for reneue of $5.5 billion. The company shipped 13.6 million phones in the third quarter, compared with 14.8 million in the second.
The company also said it has named Edward Fitzpatrick, the Motorola’s acting chief financial officer, as permanent CFO.