Motorola profit rises 46%
Stock up 7% late as phone maker offers bullish outlook
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Last Update: 6:05 PM ET Jul 19, 2006
WASHINGTON (MarketWatch) -- Motorola Inc. on Wednesday said second-quarter profit jumped 46% as the company shipped a record number of wireless phones and benefited from a large one-time tax gain and a legal settlement.
The world's No. 2 maker of wireless phones also issued a bullish third-quarter sales forecast -- easily surpassing the Wall Street consensus -- on expectations of further strength in its mobile handset business.
Investors bid up Motorola (MOT : Motorola, Inc.
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MOT19.25, +0.37, +2.0%) shares as much as 7% in afterhours trading.
After U.S. markets closed, Motorola reported a second-quarter profit of $1.38 billion, or 55 cents a share. That was up from $933 million, or 37 cents a share, a year earlier.
Revenue for the Chicago-based technology giant rose 29% to $10.9 billion from $8.41 billion, as the vendor shipped 51.9 million wireless-phone handsets, another quarterly record. Motorola shipped 46.1 million phones in the first quarter.
Once again, Motorola's sleekly designed Razr series of phones fueled brisk demand, while the company's Q smartphone got off to a good start. The Q, viewed as a BlackBerry for the masses, was launched in the last month of the quarter.
Motorola also said it boosted its global share by 1 percentage points to 22% from the prior quarter, its highest level in years.
"Motorola continues to deliver excellent quarterly sales and earnings growth," Chief Executive Ed Zander said in a statement.
During the second quarter, Motorola recorded a tax benefit of 11 cents a share and a onetime gain of 10 cents a share related to the resolution of a long-standing legal dispute with Turkish mobile carrier Telsim.
Excluding one-time items, Motorola earned 33 cents a share from continuing operations. The company was expected to earn 30 cents a share on sales of $10.1 billion, according to the consensus of analysts surveyed by Thomson First Call.
Looking ahead, Motorola said it expects to generate revenue of $10.9 billion to $11.1 billion in the third quarter, sharply higher than Wall Street's forecast of $10.3 billion.
Solid second quarter
In the second quarter, the company's mobile devices unit registered a 46% increase in revenue to $7.14 billion. Operating profit totaled $799 million, up from $493 million a year earlier.
The networking-equipment division, meanwhile, partly bounced back from a disappointing first quarter as sales rose 3% year over year to $2.9 billion. Operating income fell to $386 million from $494 million a year earlier, but it topped the first-quarter level of $299 million.
The broadband division generated sales of $803 million and operating income of $56 million, reversing a small loss in prior first quarter.
The division shipped a record 2.4 million set-top boxes for high-tech TV systems during the quarter.
Motorola (MOT : Motorola, Inc.
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Last: 19.25+0.37+1.96%
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MOT19.25, +0.37, +2.0%) shares rose as high as $20.60 in after hours trading after gaining almost 2% during Wednesday's regular session.
