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Motorola (MOT) shares are on the rise ahead of Tuesday afternoon’s third quarter earnings report.

Scott Coleman, an analyst at Morgan Stanley, wrote in a research note today that he expects “modest upside” to his estimate of $11.1 billion in sales and profits ex-options of 34 cents a share, driven by market share gains and expanding margins in handsets, a rebound in wireless networks and reduced investments in China. He forecasts shipments of 55.9 million handsets for the quarter, up 8% sequentially, on strong RAZR sales. Coleman says the key points to listen for on the conference call include a forecast for the Q4 global handset market; the ASP outlook for the quarter; timing of the launch of the MOTOFONE and an update on the fiber build out at Verizon, for which Motorola is a component provider.

Matthew Hoffman, an analyst at Cowen, says there is some risk that the report on Tuesday could disappoint, to the extent the stock is already discounting large market share gains and upside to the consensus numbers. Nonetheless, he’s expecting upbeat commentary from the company on the fourth quarter outlook. In fact, Hoffman tweaked his estimates for the full year: he’s now expecting $1.35 a share, up from $1.34. He’s looking for Motorola to sell 55-56 million units in the quarter, above his official 54 million unit estimate; he sees 255 million total handsets industry wide in the quarter, up 10 million from his previous estimate. He now sees total 2006 global handset sales at 1.003 billion units, up from 990 million.

Source: Motorola Stock Discounting Market Share Gains Ahead of Earnings?