April 21, 2004, 4:30 PM — Motorola Inc. on Tuesday reported a giant leap in net income and sales for its first quarter as a result of strong handset sales and solid performance at its other units.
The Schaumburg, Illinois, company reported first-quarter net income of US$609 million, or $0.25 per share, compared to $169 million, or $0.07 per share, in the year-ago period. Net sales came in at $8.56 billion, up from $6.04 billion in the same quarter last year, Motorola said in a statement.
The results blew past Motorola's first quarter guidance and analyst estimates. In January, the company predicted net income of between $0.05 and $0.07 per share, and sales of $6.4 billion to $6.8 billion. Wall Street had been expecting first-quarter sales of $6.75 billion, according to a consensus estimate compiled by Thomson First Call.
Motorola is also upbeat about the current quarter. It forecast second-quarter earnings per share of between $0.14 and $0.18, and sales of $8.2 billion to $8.6 billion. Analysts polled by Thomson First Call were forecasting sales of $6.92 billion.
The first-quarter earnings include $238 million in pretax income, or $0.07 per share after tax, in special items, Motorola said. Last year's first quarter included earnings of $225 million before tax, or $0.06 per share after tax, Motorola said.
Motorola's (NYSE:MOT) shares on the New York Stock Exchange were down $0.48 at the end of the regular trading session, at $16.22, but soared past $20 following the earnings news in after-market trading on INET.
Motorola sold 25.3 million mobile phones during the quarter, up from 16.7 million a year earlier. Sales in its Personal Communications Segment were $4.1 billion, up 67 percent from last year, the company said. Mobile phone sales were especially strong in Europe, Motorola said.
Finland's Nokia Corp., Motorola's chief rival in the handset space, last week reported a first quarter drop of 15 percent in net mobile phone sales, to €4.3 billion ($5.17 billion, as of Tuesday). Nokia, the world's largest mobile phone maker, said it shipped 44.7 million units in the first three months of 2004.
Motorola also reported a solid sales increase at its semiconductor unit, which it plans to spin off later this year as a separately listed entity called Freescale Semiconductor Inc. The unit reported sales of $1.4 billion, up 21 percent from $1.15 billion. The increase was attributed to sales of products for the networking and wireless markets.
Almost all of Motorola's other product segments, which include mobile telephony networks, TETRA radio systems used by emergency services, set-top boxes and embedded devices, delivered increases in sales and improved operating earnings