Motorola Inc.'s share of the wireless handset market slumped to 6 percent in the first quarter, a giddy drop from more than 20 percent years ago, as the company struggled to reconnect with customers globally.
The company said it shipped 14.7 million mobile handsets in the quarter, down from 27.4 million units in the comparable 2008 quarter with sales for the division falling to $1.8 billion from $3.3 billion. The mobile handset division reported operating loss grew to $509 million during the quarter from $418 million in the first quarter of 2008.
Motorola's companywide net loss widened to $231 million, or 13 cents per share, from a net loss of $194 million, or 9 cents per share, in the year-ago quarter. Revenue for the just ended quarter fell 28 percent, to $5.4 billion, from $7.5 billion in the first quarter of 2008. Analysts were expecting revenue of approximately $5.6 billion for the quarter.
Motorola executives said the company is making progress with its cost reduction and reorganization programs, including plans—now temporarily suspended—to spin off the mobile handset division as an independent business.
The reorganization action contributed to a sharp reduction in Motorola's cash position at the end of the quarter. Cash and short-term investments fell to $6.1 billion from $7.4 billion at the end of 2008, the company said, attributing the decline to a "$700 million reduction in accounts receivable sold and approximately $200 million in restructuring-related payments."
Motorola said it expects to start generating positive cash flow starting in the second half of this year.
All the company's business divisions posted negative revenue growth during the first quarter. Led by the mobile devices division. Sales in the home and networks mobility business fell 16 percent, to $2 billion from $2.4 billion while the enterprise mobility unit posted revenue of $1.6 billion, down 11 percent, from $1.8 billion in the comparable quarter of 2008.