Press release
- Second-quarter sales of $8.1 billion
- Second-quarter results exceed expectations
- Positive operating cash flow of $204 million; ended the quarter with a net cash position of $3.6 billion
- Home and Networks Mobility sales growth of 7 percent and operating earnings growth of 28 percent as compared to the second quarter of last year
- Enterprise Mobility Solutions sales growth of 6 percent and operating earnings growth of 24 percent as compared to the second quarter of last year
- Mobile Devices shipped 28.1 million handsets, and maintained handset market share
SCHAUMBURG, Ill. – July 31, 2008 – Motorola, Inc. (NYSE: MOT) today reported sales of $8.1 billion in the second quarter of 2008. GAAP net earnings from continuing operations in the second quarter of 2008 were $4 million, or $0.00 per share. This included net charges of $0.02 per share from highlighted items which are listed in the table at the end of the press release.
The Company had positive operating cash flow of $204 million and ended the quarter with a net cash* position of $3.6 billion and a total cash** position of $7.8 billion.
“Motorola’s Home and Networks Mobility and Enterprise Mobility Solutions segments delivered strong results in the second quarter, driven by sales growth and operating margin expansion. These segments are well positioned to continue generating year-over-year sales and margin growth during the second half,” said Greg Brown, Motorola president and chief executive officer. “In the Mobile Devices segment, we launched ten new products and maintained market share, compared with the first quarter, while continuing to invest in our product portfolio. We also made progress on our plans to separate Motorola into two independent, publicly traded companies, generated positive operating cash flow and reduced our cost structure.”
Operating Results
Mobile Devices segment sales were $3.3 billion, down 22 percent compared to the year-ago quarter. The segment reported an operating loss of $346 million, compared to an operating loss of $332 million in the year-ago quarter.
Mobile Devices highlights:
* Shipped 28.1 million handsets, and maintained its share of the global handset market
* Launched ten new products to key markets around the globe, which included new 3G devices and the ROKR E8 that strengthened our music franchise with its innovative, ModeShift™ morphing technology
* Refreshed the highly successful MING series, which has already sold 8 million handsets, by launching three touch screen handsets – MING A1600 and MING A1800, as well as the MOTO A810
* Continued market share leadership in North America, with strong performance from W755
* Continued strength in Latin America, maintaining a leading market position due to the strong performance within our music portfolio
* Earlier this week began shipping the MOTOZINE ZN5, a superior imaging experience developed collaboratively with Kodak, which enables consumers to easily shoot, edit and share their pictures
Home and Networks Mobility segment sales were $2.7 billion, up 7 percent compared to the year-ago quarter. Operating earnings were $245 million, which represents an increase of 28 percent as compared to operating earnings of $191 million in the year-ago quarter.
Home and Networks Mobility highlights:
* Operating margin expansion year-over-year from 7.4 percent of sales to 8.9 percent of sales
* Record sales in Home, driven by shipments of 4.9 million digital entertainment devices, due to continued strong demand for HD, HD/DVR and IPTV devices
* Consumer demand for HD content continued to drive the uptake of MPEG-4. This quarter we added DirectTV, HBO LatAM and Starz to the lineup of programmers and service providers transitioning from MPEG-2
* DOCSIS® 3.0 momentum with certification for multiple Motorola cable modems, bronze qualification for the BSR 64000 cable modem termination system edge route, as well as customer deployment with J-Com in Japan
* Momentum in WiMAX continued and Motorola now has 19 contracts for commercial WiMAX systems in 16 countries
Enterprise Mobility Solutions segment sales were $2.0 billion, up 6 percent compared to the year-ago quarter. Operating earnings increased to $377 million, which represents an increase of 24 percent as compared to operating earnings of $303 million in the year-ago quarter.
Enterprise Mobility Solutions highlights:
* Operating margin expansion year-over-year from 15.8 percent of sales to 18.5 percent of sales
* Strong international demand continued in the enterprise and public safety markets, as sales outside of North America grew by approximately 21 percent compared to the year-ago quarter
* Launched the MC75 Rugged Enterprise Digital Assistant, the first size-optimized rugged mobile computer with 3G WAN (HSDPA and EVDO rev A) and integrated GPS navigation
* Key international systems wins, including digital communications awards from Shanghai Metro and Beijing Police
* After the end of the quarter, signed a definitive agreement to acquire AirDefense, a leading wireless LAN security provider
