Reviewing Motorola Ahead of Earnings (MOT)

Motorola (NYSE:MOT) reports earnings this week and First Call has estimates at $0.04 EPS and $8.8 Billion.  We wanted to run over a recent call here ahead of plan since this just got a Cramer bump.  On tonight’s MAD MONEY on CNBC, Jim Cramer was discussing Motorola’s (NYSE:MOT) Ed Zander as being on the CEO "Hall of Shame" as one to go, although he doesn’t think that will happen with this week’s earnings. 

Cramer gave a quick break-up analysis of Motorola broken up into 3 parts (handsets, equipment, and set-top boxes) coming up to $24.60.  We ran our own valuation comparison for a break-up earlier this year and determined a rough value of $26.70. 

The company does at least have Carl Icahn that can create some stirring up this week since he’ll be making out quite well in both Biogen and in BEA Systems.  Now that things are starting to happen in these companies, Icahn may have more time to go back over Motorola.  Our only issue is that it seems Motorola is very stuck right now and it took some time for Freescale to work out quite well.  If this was just a month ago when shares were at $17.00 we’d assign a $22.00 break-up value, and we aren’t as optimistic on this one today as a break-up or turnaround candidate in a different investment climate compared to earlier this year. 

If you like to see private break-up analysis not available to the public, we have our "Special Situation Investing Newsletter" where we have our own private analysis of break-ups, buyout candidates, spin-offs, reorganizations and the like. 

Jon C. Ogg
October 15, 2007