Motorola (NYSE: MOT) is riding high today on
a surprisingly bright
outlook. This might be the start of a new era in
Motorola's long history -- powered by
Google (Nasdaq: GOOG) Androids.
Third-quarter earnings per share of $0.01 puts Motorola in
the black by the skin of its teeth -- a huge improvement over
the year-ago period's $0.18 loss per share. Sales rolled in
at $5.4 billion, some 27% lower than last year. These figures
are very close to what the average Wall Street analyst had
expected, so we have to look elsewhere to explain the 11%
jump in Motorola's share price.
Management kicked its guidance for the fourth quarter up a
notch. Before this report, Motorola was aiming for an
essentially breakeven quarter to finish out 2009. Now,
management sees $0.08 per share on the bottom line, give or
take a penny.
Android phones loom large in that upbeat guidance.
Verizon (NYSE: VZ) will start selling the
very handsome
Motorola Droid handsetnext week, and that model looks
like Verizon's finest smartphone to date.
Apple (Nasdaq: AAPL) and
AT&T (NYSE: T) have shown us what a great
smartphone can
do for your profits, and Motorola might have its first
real hit lined up since the early days of the RAZR phone. The
Motorola Cliqis going out to
Deutsche Telekom 's (NYSE:
DT) T-Mobile also, but T-Mobile has a much smaller subscriber
base so the Droid gets top billing here.
Motorola has been stripping down to become a lean, mean
operator and would not have come close to positive earnings
without this cost-savings program. The savings are running
ahead of plan by $100 million this year for a total cost
reduction of $1.9 billion. If those Androids hit the ground
running with some traction, that low-cost operating model
should pave the way for some nice, juicy earnings in coming
quarters. That is, until Motorola spins out the handset
division into a separate company.
This article was originally published as
What's Up With Motorola Today?on
Fool.com
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