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Motorola rides RAZR to a strong quarter

Need proof that investors are increasingly fickle? Check out Motorola this morning. The company reported that sales and shipments both grew much more than expected, but the stock went down 6% in morning trading on the news. The reason? Same story we are seeing with all of the makers these days – operating margins are down because of low-end phones in emerging markets, and they aren’t likely to get better as the companies compete to capture their share of those new markets.

Despite the market pessimism, the results for Motorola were almost universally strong. Sales were up 23% to over $10 billion. They were so strong that they came close to matching the sales for last quarter, which is boosted because of the holiday season. The numbers beat industry projections by more than $500 million. Handset shipments jumped by 61% to 46.1 million units. Market share climbed over 20% for the first time in seven years. Operating profits were up 60% to $702 million. In other words, the stock price may be down, but it isn’t time for the company to panic just yet.



About T.O. Whenham

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