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Oct. 25, 2007

Despite numerous warnings that the company would not return to profitability in 2007, nevertheless, Motorola still reported its first profit in three quarters.

The mobile phone manufacturer reported positive cash flow of $342 million, and reduced cash conversion cycle to 43 days, the company says.

Even if its outlook is improving, Motorola's third-quarter earnings weren't that strong.

The company's overall net income fell 94 percent to $60 million, from $968 million in 2006. Sales fell 17 percent to $8.81 billion.

Motorola is still suffering. It announced that it shipped 37.2 million handsets in the previous quarter, including more than 900,000 RAZR-2 phones.

The company also estimates that its share of the global handset market for the quarter is about 13 percent, though sales in the mobile device unit were just $4.5 billion, down 36 percent from the same quarter in 2006.

Ed Zander, Motorola's chairman and CEO said "we are pleased with the improvement in the financial performance of mobile devices and we look forward to building upon the progress we have made."

Motorola recently did some restructuring in its efforts to return to overall profitability, some of which seems to have paid off.

Its Home and Networks Mobility segment reported sales of $2.4 billion, up almost 6.05 percent compared with 2006's corresponding quarter.

Tom Meredith, CFO of Motorola said "during the third quarter, we maintained our focus on increasing cash flow, enhancing profitability and driving growth."

"We are beginning to see improvements in our cash conversion cycle and operating cash flow which will lead to increased financial flexibility," added Meredith.

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Source: Wireless Week