Motorola Likely to Report Yet Another Dismal Quarter

As earnings season lurks around the corner, individual investors are advised to tread caution on Motorola (MOT) stock. With Mr. Ichan out of the fray, management is very likely to disappoint once again. It's advisable to have puts.

Earnings Preview

1) Motorola is likely to report a dip in sales. QoQ sales number is likely to be around 8.2-8.3 billion.
2) Motorola likely to post operating loss of $160-180 million. Of this, approximately $130 million is likely to be on acquisition and restructuring charges
3) Handset sales will be around 39-40.5 million units.
4) Motorola will have lost market share from 17.5% in Q1 to 16.2% in Q2.

Further Observations

1) Lot of inventory (approximately in excess of 4 million units) seems stuck in distribution channels. It may take a little longer for this to be flushed out.
2) Emerging market orders seem to be dwindling fast

Disclosure: Author has a short position in MOT

MOT 1-yr chart