Motorola Gains Market Share But Misses Q3 Sales Target

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Motorola's 3Q Sales Miss Forecast [AP]

Summary: Motorola's stock sank more than 7% in after-hours trading following its Q3 earnings announcement yesterday. Although Motorola added nearly 4% to its global market share now at 22.4% compared to the same quarter last year, its revenue of $10.6 billion -- a 17% y-o-y increase -- came up short of analysts' consensus and its own target. The 45% drop in its net income to $968 million, or 39 cents/share, was in-line with expectations. A Prudential analyst comments, "We believe that Motorola is a well-positioned handset vendor. However, increasing market share while improving operating margins at the same time may prove difficult to achieve over the longer term." Part of its sales shortfall and lower profit can be attributed to the rollout of the Krzr phone, an update to its Razr handset.
Related links: Motorola Comments on Sales Shortfall • Motorola Earnings Press Release • Motorola Stock Discounting Market Share Gains Ahead of Earnings? • Motorola Deploying Cell Phone Kiosks • Analysts Applaud Motorola's Buyout of Symbol • Conference call transcript: Motorola Q3 2006
Potentially impacted stocks and ETFs: Motorola (MOT), Nokia (NOK), Palm (PALM), Research in Motion (RIMM); Motorola represents a significant percentage of assets in the following ETFs: Broadband HOLDRs (BDH), iShares Goldman Sachs Networking (IGN), iShares Goldman Sachs Semiconductor (IGW), Wireless HOLDRs (WMH)

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