* Third-quarter sales up year-over-year; first growth quarter since fourth quarter of 2006
* Third-quarter GAAP earnings of .05 per share, compared to GAAP earnings of .01 per share in third quarter of 2009
* Non-GAAP earnings per share*, including discontinued operations, of .16 compared to .06 per share in third quarter of 2009, exceeding the Company’s guidance of .10 - .12 per share
* Total cash** increased to $9.0 billion
* Mobile Devices sales of $2.0 billion; shipped 9.1 million handsets, including 3.8 million smartphones; GAAP operating loss of $43 million; non-GAAP operating earnings of $3 million
* Enterprise Mobility Solutions sales of $1.9 billion; GAAP operating earnings of $253 million; non-GAAP operating earnings of $321 million
* Home sales of $912 million; GAAP operating earnings of $49 million; non-GAAP operating earnings of $77 million
Motorola, Inc. (NYSE: MOT) today reported sales of $4.9 billion in the third quarter of 2010, up 13 percent from the third quarter a year ago. Financial results related to the portion of the Company’s Networks business expected to be acquired by Nokia Siemens Networks (“NSN”) are reported as discontinued operations. Sales, including $871 million associated with discontinued operations, totaled $5.8 billion, up 6 percent from the year-ago period.
GAAP net earnings in the third quarter of 2010 were $109 million, or .05 per share, compared to $12 million, or .01 per share, in the third quarter 2009. On a non-GAAP basis, including discontinued operations, earnings in the third quarter of 2010 were $380 million, or .16 per share, exceeding the Company’s guidance of .10 - .12 per share. Non-GAAP earnings, including discontinued operations, in the third quarter of 2009 were $131 million, or .06 per share.
GAAP earnings from continuing operations in the third quarter of 2010, which excludes the portion of the Networks business expected to be acquired by NSN, were $7 million, compared to a loss from continuing operations of $90 million in the third quarter of 2009. Non-GAAP earnings from continuing operations in the third quarter of 2010 were $278 million, or .12 per share, up from .01 per share in the third quarter of 2009.
Non-GAAP financial information excludes after-tax costs of approximately .12 per share related to stock-based compensation expense, intangible assets amortization expense and highlighted items. Details on these non-GAAP adjustments and the use of non-GAAP measures are included later in this press release.
During the quarter, the Company generated positive operating cash flow from continuing operations of $502 million and ended the quarter with a total cash** position of $9.0 billion. Net cash*** increased to $5.6 billion from $4.9 billion in the second quarter.
“In the third quarter, Motorola Mobility showed positive momentum across the business, with Mobile Devices reaching profitability for the first time in over three years and Home continues to maintain its leadership position,” said Sanjay Jha, Motorola co-chief executive officer and Motorola Mobility CEO. “Mobile Devices’ DROID™X continues to sell extremely well, and we have had several other successful smartphone launches globally, including the DROID™ 2, the MING® series in China, as well as a well-received introduction of our enterprise-ready DROID™ PRO. As we continue to make progress across the organization, we remain focused on further improving our financial results and pursuing the delivery of best-in-class software and hardware experiences to consumers and business users.”
Greg Brown, Motorola co-chief executive officer and Motorola Solutions CEO, said, “Our Enterprise Mobility Solutions business continues to deliver very solid financial results. In enterprise markets, we continued to experience double-digit sales growth in all four geographic regions we serve. Additionally, our public safety business remains resilient. Going forward, we are focused on next-generation public safety and enterprise solutions and services. I am excited about the opportunities ahead as we approach our targeted separation.”
Mobile Devices segment sales were $2.0 billion, up 20 percent compared with the year-ago quarter. The GAAP operating loss was $43 million compared to an operating loss of $216 million in the year-ago quarter. Non-GAAP operating earnings were $3 million compared to an operating loss of $183 million in the year-ago quarter.
Mobile Devices highlights:
* Shipped 3.8 million smartphones with a total of 22 smartphones introduced during 2010.
* Launched three new smartphones in the iconic MING® series designed for China – the MT810 for China Mobile’s TD-SCDMA network, the XT806 for China Telecom’s CDMA-2000 network and the A1680 for China Unicom’s WCDMA network.
* Unveiled the slim and pocketable Motorola DEFY™, optimized for an active lifestyle, water resistant, dust proof and equipped with a 3.7-inch high-resolution, scratch-resistant display.
* Continued to grow the DROID™ portfolio with the introduction of three new devices, available at Verizon – DROID™ 2, DROID™ PRO and the limited edition DROID™ R2-D2™.
* Recently announced three new smartphones available for the holiday season at AT&T: BRAVO™, FLIPSIDE™ and FLIPOUT™, designed for the next generation of smartphone users across tiers, providing consumers greater choices and flexibility.
* Continued leadership in Bluetooth™ headset technology with the introduction of four headsets: the Motorola Oasis™, S10-HD, Finiti™ and CommandOne™.
Home segment sales were $912 million, up 5 percent compared with the year-ago quarter. GAAP operating earnings were $49 million compared to $20 million in the year-ago quarter. Non-GAAP operating earnings were $77 million compared to $43 million in the year-ago quarter.
* Launched the Motorola EDGE™ Service Assurance Software Suite, enabling cable and telecom operators to more efficiently activate, provision, maintain and support all broadband services in a multi-screen digital home.
* Introduced a hosted switched digital video solution that provides independent operators with the bandwidth reclamation and management capabilities needed to launch HDTV, VOD, 3DTV and interactive TV applications.
* Supported Verizon with the launch of its video service by providing the Motorola Medios software suite to ingest content and prepare it for distribution, enabling subscribers to share video among devices such as set-top boxes, personal computers and smartphones.
Enterprise Mobility Solutions segment sales, which now includes the iDEN® infrastructure business, were $1.9 billion, up 9 percent compared with the year-ago quarter. GAAP operating earnings were $253 million compared to operating earnings of $223 million in the year-ago quarter. Non-GAAP operating earnings were $321 million compared to $303 million in the year-ago quarter.
Enterprise Mobility Solutions highlights:
* Secured a $50 million federal government grant to expand broadband access to communities in the San Francisco Bay Area, including a private broadband LTE network for public safety.
* Announced a strategic alliance with Ericsson for an LTE-based solution that will be integrated with Motorola’s Next Generation Public Safety Broadband solution.
* Introduced the new MC65, a compact, rugged enterprise mobile computer aimed at improving productivity in task-oriented environments such as field service, field sales, transportation and public safety.
* Began shipping the new ES400 enterprise digital assistant, which will be available globally during the fourth quarter.
* Received multi-million dollar public safety contracts from the U.S. Marshals Service, Washington Metro Area Transportation Authority and Nashville-Davidson County Metropolitan Government in Tennessee.
Fourth-Quarter 2010 Outlook
The Company's outlook for the fourth quarter of 2010 is for earnings from continuing operations of .14 to .16 per share. This outlook excludes the portion of the Networks business expected to be acquired by Nokia Siemens Networks, and stock-based compensation expense and intangible assets amortization expense of approximately .04 per share, as well as charges associated with items of the variety typically highlighted by the Company in its quarterly earnings releases.