By Amy Thomson and Vivek Shankar
Motorola Inc., the world's third- largest maker of mobile phones, posted third-quarter earnings that beat analysts' estimates after cutting more than 9,000 jobs in two years to make up for slumping sales.
The company delayed a plan to split of its handset division by the third quarter of 2009, citing the financial crisis and slowing economy. The company said in March it plans to separate the unit to focus on profitable TV set-top boxes, two-way radios and wireless-networking gear.
Motorola said it will exceed its goal of cutting $1 billion in expenses this year. Co-Chief Executive Officers Greg Brown and Sanjay Jha, who was hired in August to revive the phone unit, are overhauling the company to win back sales lost to Nokia Oyj and Samsung Electronics Co. Handset sales fell 32 percent to 25.4 million units, the seventh straight drop.
"The bottom line was better'' as the cost cuts are having an effect, said Matthew Thornton, a Boston-based analyst at Avian Securities LLC. He rates the stock ``neutral.''
Profit, excluding costs from job cuts, was 5 cents a share, Motorola said today in a statement. That exceeded the 2 cents analysts in a Bloomberg survey projected. The company said it plans to reduce costs by $800 million next year.
Profit this quarter will be 2 cents to 4 cents a share, excluding costs for job cuts, Motorola said. That missed the 7- cent average analyst estimate.
Motorola, based in Schaumburg, Illinois, rose 39 cents, or 7.1 percent, to $5.85 in early trading. The stock closed at $5.46 on the New York Stock Exchange yesterday. It had lost 66 percent this year before today.Continued...
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