Motorola Inc. recorded a small profit in the fourth quarter buoyed by improving margins and a sharp decrease in special charges that pushed the company into a multi-billion dollar loss in the final quarter of 2008.
The company said it earned $142 million, or 6 cents per share, in the three months ended Dec. 31, compared with net loss of $3.7 billion, or $1.61 per share, in the comparable year-ago quarter. Revenue continued to drop, however, plunging 20 percent to $5.7 billion from $7.1 billion in the fourth quarter of 2008.
Although its sales fell in the fourth quarter, Motorola benefited from efforts to improve its operating structure, lifting gross profit margins, for instance, to about 36 percent in the recent quarter from 30 percent in the comparable 2008 quarter. In the year-ago quarter, Motorola also recorded "other charges" of $1.7 billion compared with $106 million in the fourth quarter of 2009.
The company has taken further steps in recent months to improve the performance of its mobile handset division, including introducing a slew of new products, which Motorola said have been well received by consumers. Fourth quarter sales in the handset division declined, however, to $1.8 billion from $2.4 billion with unit shipment dropping to 12 million for a 3.7 percent market share.
Nevertheless, company executives said they were making progress in efforts to revamp the mobile handset division, although its planned spin-off as an independent business has now being placed on hold.
"We are pleased with the meaningful progress we made in 2009 in further improving our cost structure and strengthening the operations of the Mobile Devices business," said Sanjay Jha, Motorola co-CEO and head of the mobile devices business.
"Our first Android smartphone devices have been very well received," he added. "With an aggressive product and brand strategy and our continued focus on operational efficiency, we are building on our momentum to further improve the financial performance of the Mobile Devices business."
All of Motorola's business divisions experienced lower sales in the fourth quarter compared with the year-ago period. Sales in the enterprise mobility division dropped 12 percent to $2 billion while the home and networks mobility unit also reported sales of $2 billion, down 24 percent.
For the entire year, Motorola recorded a net loss of $51 million compared with net loss of $4.2 billion for 2008. Sales in 2009 fell to $22 billion from $30 billion in the immediately preceding year.