Motorola Struggles as Loss Widens

[steven johnson]

Motorola is having a lean time in it's products' cycle. BlackBerry and iPhone have taken a big bite in the smart phone business.

Motorola Inc. burned through $1.3 billion in cash in the first quarter, as the credit crunch crimped the telecom-equipment maker's ability to sell off accounts receivable, while cellphone sales plunged.

In reporting its financial results Thursday, the Schaumburg, Ill., company said it is trying to make up for declining sales in most of its businesses with faster cost cuts, but those, too, have drained cash for severance payments and other restructuring charges.

Co-Chief Executive Greg Brown predicted that the company, whose total cash dropped to $6.1 billion from $7.4 billion at the end of 2008, would consume less cash in the second quarter and generate cash in the second half. But that depends on seasonal improvement in certain businesses and doing a better job of managing its cash reserves. Since December, the company has scrapped its dividend, frozen pensions and stopped contributing to retirement plans.

The company's Mobile Devices unit saw sales drop to $1.8 billion, down 45% from a year earlier, and its operating loss reached $509 million, widening from a loss of $418 million in the year-earlier quarter but narrower than the $595 million it lost in the prior quarter.

http://www.wsj.com/article/SB124109071922972829.html

[mopinko]

1. motorola just doesn't seem to be able to get ahead of the curve on anything.

maybe they have just spent too much time in the protected world of government contracts to know how fast things move in the consumer sector. they seem like they never got back on their feet after they lost the tv business.