Motorola: Get Ready for Another Grim Quarter

The Street is bracing for another grim quarter from Motorola (MOT) when the handset maker posts results on July 31.

Goldman Sachs’ Simona Jankowski this morning warned that the company is likely to miss consensus estimates for the quarter due to the continued weakness in its mobile devices business. Jankowski contends that handset unit sales likely declined again in the quarter on further market share losses; she also thinks ASPs declined more than expected due to a more competitive environment, a less competitive product offering and a mix shift to the low end. She now sees mobile device sales down 11% sequentially and 32% year-over-year, much worse than the guidance for a flat to slightly up sequential quarter. Jankowski now sees the company losing 7 cents a share for the year, down from her previous forecast of a profit of one cent. For 2009, she cuts her EPS estimate to 41 cents, from 47 cents.

Jankowski cuts her handset unit estimate for Motorola to 25.5 million, from 27.6 million, which would be down from 27.4 million in Q1. That would reduce market share to 8.4% from 9.3%; she contends the company lost market share domestically to both Nokia and Sony Ericsson.

Finally, Jankowski thinks Q3 guidance will be below Street expectations; she sees MOT forecasting a loss of a penny a share, rather than the Street’s projected penny-a-share profit.

In a similarly bearish note, Nomura’s Richard Windsor this morning said that Q2 results “are likely to show further deterioration, and that the outlook “is likely to be grim.” And he says that the company find itself losing many key people, “with the collapse now in its second year and no sign of recovery.” Windsor says that “unless action is quickly taken to retain key people, the recovery will be made all the more difficult.”

Comments

[skwestorange]

Does MOT not have other businesses, besides the headset division? Are they not making any money either?

[TinyTim]

yeah, they have the original first-responder radio business & cellular infrastructure & set-top boxes / modems (GI). That's about it.

They've been trying to unload the cell phone business for a while. No takers. Icahn forced a separation. Similar to Freescale, which appears to be dying a slow death by being sucked down with Moto.

Yet they sue when talent leaves:
online.wsj.com/article...