Motorola Loss Widens on Weak Phone Sales

Motorola said today first-quarter loss widened as sales in the company's key handset unit fell 39 percent, extending a two-year slump. Coming as Motorola is in the midst of massive upheaval, Motorola announced plans earlier this spring to split itself into two publicly traded companies to revive its cell phone unit.

Greg Brown, Motorola's new CEO, said spinning off its troubled cell phone division "unlocks" the value of the business, which has no strategic value to the rest of the company. Motorola has struggled to come up with a successful phone since launching the RAZR in late 2004. It has also failed to bolster its high-end line of handsets, even as it faces new competition from the likes of the Apple iPhone.

The company has a new chairman as well as a new chief executive and has seen a fleet of senior executives leave in recent months.

The company posted a loss of $194 million, or 9 cents per share compared with a loss of $181 million, or 8 cents a share a year ago. Sales fell about 21 percent to $7.45 billion, down from $9.43 billion a year ago.

Motorola's mobile devices business saw its first-quarter operating loss widen to $418 million from $233 million in the year-earlier quarter on revenue of $3.3 billion, which was down 39 percent from a year earlier. The division shipped about 27 million handsets during the quarter and its share of the global market fell to less than 10 percent - down from 22 percent last year in 2006.

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