When’s the Motorola (MOT) turnaround? We’ll know more Thursday morning, when the company reports quarterly results, but in the meantime, Goldman Sachs analysts Brantley Thompson is seeing some light at the end of the tunnel, perhaps, for a company whose shares are down 21% in the last 12 months.
Thompson says the cost of Motorola’s phones probably fell to $127 in the third quarter, from $128, and says each $1 reduction in cost translates into an extra penny in profit. Which has caused him to raise his 2007 earnings estimate by a penny to 13 cents per share. Thompson notes that his estimate is still below the consensus on Motorola, with analysts forecasting $8.8 billion in sales last quarter and 4 cents profit, above Thompson’s $8.1 billion and 3 cents.
His conclusion: “While we continue to believe it's too early to buy for a turnaround, we are warming up to the stock as a result of some of the changes we are seeing in the company.” Thompson thinks the shares are worth $18.
