Motorola Fueled by New Phones & Earnings
By LongDistanceUS.com on Friday, July 21 2006
With unexpectedly strong growth in its second-quarter earnings boosting Motorola Inc.’s fortunes, the handset vendor plans to feed the buzz by launching an undisclosed number of much-anticipated new handset models next week at its annual analyst meeting outside Chicago.
Based on Motorola executives’ remarks during the company’s earnings conference call yesterday, the company clearly is confident that between strong earnings and new handsets, Motorola will continue to fuel its considerable momentum.
In the big picture, Motorola is chasing Nokia Corp.’s global market-leading position and putting further distance between the two companies and other top-tier handset vendors such as Samsung Electronics Co. Ltd. and LG Electronics Co. Ltd. Both Samsung and LG reported disappointing second-quarter results this week—signs that Nokia and Motorola are capturing their market share.
Motorola on Wednesday said that in the second quarter it achieved $10.9 billion in revenue and $1.38 billion in profit, respective increases of 29 percent and 48 percent over the same quarter a year ago. Two-thirds of the vendor’s sales derive from mobile handsets. Motorola’s stock traded up nearly 10 percent to $21.13 per share after the news.
The Midwestern handset vendor shipped 51.9 million handsets in the second quarter, up 53 percent over the year-ago quarter. Motorola estimated its global market share at 22 percent, up more than 4 percent over the year-ago quarter.
Nokia also notched strong results, but not in the attention-grabbing range of rival Motorola. The Finnish handset maker reported $12.4 billion in revenue and $1.4 billion in net profit, increases of 22 percent and 43 percent, respectively, over the year-ago quarter. Nokia shipped a staggering 78.4 million handsets in the quarter, a 29-percent increase from the year-ago quarter—an achievement by any measure, except in comparison to Motorola’s recent surge.
Nokia shares traded up nearly 2 percent to $19.70 per share after the news.
Nokia estimated its own global market share at 34 percent, up one point from the year-ago quarter but down one point from the previous quarter.