Motorola Mobility's Q2: Wall Street expects better numbers

Motorola Mobility will be delivering its earnings report for the second quarter this afternoon, and expectations are high. But are they too optimistic?
Written by Rachel King, Contributor

Motorola Mobility will be delivering its earnings report for the second quarter this afternoon, and expectations are higher than last time. But are they too optimistic?

Wall Street is looking for Motorola Mobility to report second quarter earnings of six cents a share on revenue of $3.12 billion. Analysts generally are expecting Motorola to have a big second half as it rolls out handsets like the Droid Bionic.

Last quarter, Motorola didn't do so well. It reported a GAAP net loss of $81 million, or 27 cents a share. Non-GAAP losses were eight cents a share on a revenue of $3.0 billion. Wall Street was expecting a loss of 12 cents a share on revenue of $2.82 billion. It was the Xoom tablet and some smartphones that saved the day that time.

Given the loss three months ago, investment banking group Jefferies predicts that Motorola Mobility "will likely beat low Q2 expectations due to strength in Brazil and China," and because Nokia has deteriorated globally, thus, opening the door for Motorola to fill some of that void.

As for actual numbers, Jefferies expects MMI to have sold roughly 4.3 million Android smartphones and 300,000 Xoom units during the second quarter.

Barclays Capital tops that with an even more positive outlook:

Overall, MMI’s story – carrier diversification in the US and further expansion internationally – is likely to show expected progress these results. We expect limited surprises for the quarter as management continues to make slow and steady progress in returning to profitability. For the quarter, no new major devices were launched in the US – MMI’s portfolio at Verizon only improved late in 2Q – though rising international traction is likely to be a bright spot. We currently model 9.8M total devices including 4.4M Android phones and 350K Xoom units, inline with management’s guidance of sequential unit growth across both smartphones and tablets.

Morgan Stanley is the least colorful in its expectations, predicting that MMI will post "relatively flat Q211 results." In contrast to Barclays, Morgan Stanley believes MMI shipped 4.2 million Android devices in Q2, and it shares the same option with Jefferies pinning down an estimate of 300,000 Xoom tablet units.

This is because most analysts are looking towards the third quarter for more solid and impressive results, primarily because of a slew of product releases on the way. For starters, Motorola will be counting on the Photon 4G, which launches with Sprint this Sunday. Other hopefuls on the way include the Droid 3 and Droid Bionic.


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