Motorola issued a profit warning Wednesday and the latest misstep can't be good for the tenure of CEO Ed Zander.
The latest stumble: Motorola sees second quarter sales of $8.6 billion to $8.7 billion. The company had predicted $9.4 billion. Meanwhile, Motorola sees a loss from continuing operations of 2 cents a share to 4 cents a share. That includes charges of 3 to 4 cents a share due to layoffs. According to Thomson Financial Motorola was expected to report a profit of 2 cents a share on revenue of $9.26 billion.
We'll let Motorola tell the story:
The company's shortfall in sales and earnings for the second quarter is primarily attributable to lower overall unit volumes in the Mobile Devices business in Asia and Europe. The company expects second quarter Mobile Devices shipments to be approximately 35 to 36 million handsets. The company's Mobile Devices business is expected to have a larger operating loss in the second quarter as compared to the first quarter. For the full year 2007, the company no longer expects the Mobile Device business to be profitable. Second quarter results for Connected Home Solutions and Networks & Enterprise businesses continue to meet the company's expectations.
Simply put, a mobile device business that was in trouble is even more of a problem today. Motorola's handset bets continue to haunt the company.
In addition, Motorola announced that Stu Reed, executive vice president of Motorola's supply chain group, is now president of the company's mobile devices business. Good luck Stu. More details on Motorola's issues are expected when the company reports earnings July 19.