Motorola Earnings Beat Estimates After Job Reductions (Update2)

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Slowing Handset Demand

The third-quarter net loss was $397 million, or 18 cents a share, compared with a profit of $60 million, or 3 cents, a year earlier. Sales fell 15 percent to $7.48 billion, missing the $7.82 billion average analyst estimate.

Jha, 45, is tasked with reviving a business that hasn't had a hit since the all-metal Razr flip phone, introduced in 2004. Once the industry leader, Motorola now competes against South Korea's LG Electronics Inc. to hold on to its No. 3 ranking.

Revenue from mobile phones fell 31 percent to $3.12 billion last quarter, and the unit was the company's only money-losing business with a loss of $840 million. That widened from $248 million a year earlier.

Touch Screens

Motorola's share of the global market declined to 10 percent in the second quarter from 14.5 percent a year earlier, according to researcher Gartner Inc. Nokia, based in Espoo, Finland, led with 39.5 percent, followed by Samsung at 15.2 percent. LG, which had 8.8 percent of the market in the second quarter, said last week it sold 23 million devices in the most recent period.

Jha, who spent 14 years at San Diego-based Qualcomm, plans to sell more expensive devices with full keyboards and touch screens to boost profit. Motorola, whose older W755 phone sells for $19.99, this month unveiled the $149.99 Krave, which has a clear flip cover and a full touch screen inside. The Krave is Motorola's first touch-screen model in the U.S., challenging Apple Inc.'s iPhone.

Two weeks ago, Gartner cut its global mobile-phone sales forecast because consumers are reducing purchases and signing up for longer contracts. Unit sales will rise 8 percent this year, down from a July projection of 10 percent to 11 percent, according to Stamford, Connecticut-based Gartner. Last year, sales rose 16 percent to 1.15 billion phones. End.

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