Will Motorola (MOT) Kill Spin-Off Of Handset Business

Consumer Electronics

Published: October 30, 2008 6:24 am

Last Updated: April 28, 2020 10:35 am

Mot Motorola (MOT) missed a lot of its numbers for the third quarter. Much more important than that it fudged when it might dump its handset unit. The deal was supposed to happen in the third quarter of 2009.

If Motorola’s handset numbers get worse, the transaction may not happen at all.

Revenue fell from $8.8 billion in the period last year to $7.5 billion in the most recent quarter. MOT had an operating loss of $452 million compared to a loss of $10 million in 2007.

The results from the handset business were a mess. Revenue fell 31% to $3.3 billion. At least Motorola’s two other operations home networks and enterprise mobility were flat.

The handset operation lost $840 billion.Total operating income from the other two divisions was $666 million.

Motorola sold only 25 million handsets, which may drop it into fourth place in global market share behind Nokia (NOK), Samsung, and Sony Ericsson. Two years ago, it was No.2 in share of market worldwide.

Motorola blamed the delay in separating handsets from the rest of the company on the economy.

In reality, the spin-out cannot happen because the handset business is worthless with sales falling this rapidly and huge losses continuing to pile up.

Douglas A. McIntyre

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