Motorola Mobility warns of revenue shortfall, misses Q4 estimates

Motorola Mobility warns of revenue shortfall, misses Q4 estimates

Summary: Motorola Mobility, which is in the process of being bought by Google for $12.5 billion, expects to miss its revenue expectations for the fourth-quarter.

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Motorola Mobility, which Google is buying for $12.5 billion, said today that it expects fourth-quarter revenue to fall below Wall Street expectations.

Citing reasons including rising competition amongst other smartphone makers, the company will miss analysts' sales forecasts with projected revenue of $3.4 billion. Analysts had expected $3.88 billion at least.

Motorola Mobility said its revenue forecast included $900 million in sales for its home business section, which makes television set-top boxes.

Motorola Mobility said it would report "modest profitability", but failed to disclose any details on this. Analysts expect the company to report profit after special items of $116.2 million, or 41 cents a share.

Just over half of its 10.5 million mobile phone shipped during the fourth-quarter were smartphone models, it said.

The company also said that it was hurt by legal costs relating to intellectual property lawsuits.

Motorola Mobility is engaged in a legal scuffle with Microsoft regarding U.S. Patent No. 6,370,566, which relates to the scheduling of meetings from a smartphone, ZDNet's Mary Jo Foley reports. The U.S. International Trade Commission found that Motorola Mobility was in violation of Microsoft's patent.

Google is in the process of buying the phone maker for $40 a share in cash. Motorola shareholders approved the deal by 99 percent voting in favour of adopting the merging agreement.

But there is still a chance that the U.S. Department of Justice could step in and block the merger. So far, it has remained silent on the issue.

Google, which makes the Android mobile operating system used on Motorola and rival handset makers, also sought regulatory backing from the European Commission in November last year. While things appeared to be going smoothly for the two companies, the Commission suspended the review until more details were disclosed.

Motorola Mobility said today that it: "currently expects the transaction to close in early 2012 once all conditions have been satisfied".

The company will report its full results after the markets close on January 26th.

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Topics: Banking, Enterprise Software, Legal, Mobility, Security, Smartphones, Wi-Fi

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11 comments
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  • At the same time Samsung reported record profits. Moto should take this as

    a lesson and stop shipping such craptastic phones. Everyone who got duped into getting one regrets it and cant wait for their contract to expire to chuck it and switch oems. Or the goog could just shut down the hw manufacturing and turn it into a pure patent play. The later is certainly cheaper than the former. It would be very hard for moto to up it's build quality now that all their talent has abandoned ship.
    Johnny Vegas
    • RE: Motorola Mobility warns of revenue shortfall, misses Q4 estimates

      @Johnny Vegas you're crazy, the Droid X2 is an excellent handset for the money... I hear a lot of good things about the Razr as well... my only complaint about the DX2 was that Tethering was broken... of course the damn iPhone 4s requires you to stop and.start the hotspot multiple times before it will work half the time!
      slickjim
      • Johnny Vegas.... BIG MS fan. You Peter HUGE Android guy.

        @Peter Perry ... The ONLY problem I have verses your post as opposed to Johnny's is he did not bring Apple into the fray but you did. Now I'm supposed to believe you own an iPhone 4s and have actually struggled with the "issue" you described or read it online and claim to have knowledge of said? One is valid... the other not so much. You really should see someone about this issue you have with Apple. Emotional much?

        Pagan jim
        James Quinn
  • Goggle must be very proud ....

    ... they wasted $13B on a dead division.

    They wanted patents ..... and none of them were good enough to defend them from stealing and copying from others.
    wackoae
  • Samsung is killing the other Android vendors.

    I think they are showing the true advantage of vertical integration. It seems the last year of Android growth has come from Sammy while the rest have either lost a bit or stayed flat.
    Bruizer
    • RE: Motorola Mobility warns of revenue shortfall, misses Q4 estimates

      @Bruizer Leave it to you to skew an article towards your slanted view! They all contributed to the growth but Phones aren't the only area some of these companies play in...
      slickjim
      • Good point so perhaps Samsung is not making it's "profits"

        @Peter Perry ... from phone sales either eh? The real question with HTC going into the tank and Moto having issues is while growth is valid where is the money? Or better put why do this thing? When wll an Android OEM be swimming in the green? Or will they ever? Is this a cut throat business model that will show what exactly at the end of a long painful struggle for real profit?

        Pagan jim
        James Quinn
      • True. The major Android handset makers are growing like wild except for...

        @Peter Perry

        HTC, Motorola, SE and LG all showing a slide (as in decrease) in sales or basically flat. As I said.

        http://img.ly/cnWl

        Wait...

        That leaves Sammy showing all the major growth. Leave it for you to be unable to accept factual data and be able to have a rational discussion.
        Bruizer
  • RE: Motorola Mobility warns of revenue shortfall, misses Q4 estimates

    They will all rebound, money is starting to come out of the wallets of Americans again so the rest of the world will follow. As a result, all of these Mobile Companies will rebound and some will likely eliminate other less profitable divisions.
    slickjim
    • Ha! There are even LESS profitable divisions than their mobility divisions

      @Peter Perry ... That I'd like to see on paper. Or is the less profitable division to be eliminated the phone/tablet divisions? As for Americans and the rest of the world spending more.. Perhaps but how does that effect mobility? Are carriers going to charge more for contracts? I don't think that will fly. Will OEM's charge MORE for phones? What!?! with all the other OEM's ready to undercut them? They are in a price war you know. That won't fly either. Will more people be buying smartohones perhaps but volume does not make up for solid profits per individual sales as DELL eventually learned you know Dell the company that was once price king and number one PC seller. Dell is doing better now but one huge reason is they abandoned the whole philosophy behind the PC Price Wars and went looking for more profitable business.

      Pagan jim

      Pagan jim
      James Quinn
  • Apple is literally killing the competition

    Soon there will be only Apple.

    It is a sick market. We all lose.
    toddybottom